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This article presents an empirical analysis aimed at identifying the determinants of regional growth in Mexico by manufacturing sector in the period 1988-2008. In the framework of agglomeration economies it argues that the main factor behind Mexico's long-term regional industrial growth is Jacobs externalities (urbanization economies), and that wages are the main short-term factor behind this growth. There is heterogeneity in the determinants of regional growth according to technological intensity. Low-technology sectors appear to be more sensitive to initial wages and exhibit Jacobs externalities, while higher technology sectors show Porter economies (competition/specialization). Controlling for market conditions, agglomeration economies, and initial conditions, the south, the center and the Gulf of Mexico have a relative disadvantage for growth in medium-high-technology sectors. Moreover, only one out of the 58 Metropolitan Areas (MAs) studied shows a relative advantage for growth in this kind of industry. Relative advantage for low-technology sectors appears to be related to transportation and service infrastructure, while for high-technology sectors the main determinant is human capital.
"...This paper... review[s] and contrast[s] results of... investigations... into the determinants of the regional pattern of manufacturing growth. Particular attention is given to the deconcentration stage and the role of public policy variables... A second section consists of a discussion of the conceptual framework for the analysis of inter-area industrial growth differentials, and how specific market and cost factors, including public policy variables, are conventionally hypothesized to affect... the growth of industry across regions/sites. The third section contains the review of the empirical literature on business location decisions and inter-area industry growth. In [the] final section, ... some conclusions on the relevance of market and public policy variables for current business location decisions and their implications for state development policy [are drawn]." -- from Introduction, leaves 2-3.
This research investigates industrial regional growth and its determinants in Mexico from 1993 to 2003. Strategies of local economic development, usually based on industrial promotion, require knowing main determinants of industrial regional growth. The case study shows that there is no variable with a systematically strong effect for all industries which policymakers and planners might directly control. This finding warns us about generic policy designs uncritically based on outcomes from other experiences. Although these results show a complex problem in terms of regional policy, some recommendations for industrial spatial distribution may, however, be derived from this study. For instance, during this period and on average, industries work in favor of geographical dispersion of manufacturing. This geographical dispersion provides a unique opportunity to combine endogenous growth variables such as Jacobs economies with current macroeconomic spatial effects to design a policy of regional industrialization in Mexico. Additionally, the allocation of resources from oil exports under economic and non-economic criteria facilitates this process with no critical decisions in terms of the equity/efficiency dilemma. Results obtained may be influenced by the level of aggregation of the data and the events in the period of study such the economic crisis and recovering and the free trade liberalization policy.
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This book is open access under a CC BY 4.0 license. This book brings together a range of ideas and theories to arrive at a deeper understanding of inequality in Latin America and its complex realities. To so, it addresses questions such as: What are the origins of inequality in Latin America? How can we create societies that are more equal in terms of income distribution, gender equality and opportunities? How can we remedy the social divide that is making Latin America one of the most unequal regions on earth? What are the roles played by market forces, institutions and ideology in terms of inequality? In this book, a group of global experts gathered by the Institute for the Integration of Latin America and the Caribbean (INTAL), part of the Inter-American Development Bank (IDB), show readers how various types of inequality, such as economical, educational, racial and gender inequality have been practiced in countries like Brazil, Bolivia, Chile, Mexico and many others through the centuries. Presenting new ideas, new evidence, and new methods, the book subsequently analyzes how to move forward with second-generation reforms that lay the foundations for more egalitarian societies. As such, it offers a valuable and insightful guide for development economists, historians and Latin American specialists alike, as well as students, educators, policymakers and all citizens with an interest in development, inequality and the Latin American region.
By critically appraising current theories of both Foreign Direct Investment (FDI) and agglomeration, this book explores the variety of links that exist between these two externality-creating phenomena. Using in-depth empirical research on Mexico, Jacob Jordaan constructs and analyzes several datasets on Mexican manufacturing industries at various geographical scales, creating innovative models on FDI externalities that incorporate explicitly regional considerations. The empirical findings identify both direct FDI spillover effects as well as the effects of agglomeration on these externalities. In extension of this, the analysis also contains analysis of FDI productivity effects that arise through inter-firm linkages between FDI and local Mexican suppliers.