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Economic structure, productivity, and infrastructure quality in southern Mexico

  • Deichmann, Uwe
  • Fay, Marianne
  • Jun Koo
  • Lall, Somik V.

There are large and sustained differences in the economic performance of sub-national regions in most countries. The authors examine the economic structure and productivity in Southern Mexico and compare it with the rest of the country. The authors use firm level data from Mexican manufacturing to test the relative importance of firm level characteristics (such as human capital and technology adoption) compared with external characteristics (such as infrastructure quality and regulatory environment) in explaining productivity differentials. The authors find that the economic structure of Southern Mexico is considerably different from the rest of the country, with the economic landscape dominated by micro enterprises and a relative specialization in low productivity activities. This, coupled with low skill levels and fewer skill upgrading opportunities, reduces the performance of Southern firms. Productivity differentials between Southern firms and others, however, only exist for micro enterprises. The econometric analysis shows that while employee training and technology adoption enhance productivity, access to markets by improving transport infrastructure that link urban areas also have important productivity effects.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2900.

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Date of creation: 31 Oct 2002
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Handle: RePEc:wbk:wbrwps:2900
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  2. Lall, Somik V. & Shalizi, Zmarak & Deichmann, Uwe, 2004. "Agglomeration economies and productivity in Indian industry," Journal of Development Economics, Elsevier, vol. 73(2), pages 643-673, April.
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  5. Talan Iscan, 1998. "Trade Liberalization and Productivity-A Panel Study of the Mexican Manufacturing Industry," Department of Economics at Dalhousie University working papers archive tradelib, Dalhousie, Department of Economics.
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  12. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
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