OECD Productivity Working Papers

ISSN: 
2413-9424 (online)
DOI: 
10.1787/24139424
Hide / Show Abstract
The OECD Productivity Papers are associated with the Global Forum on Productivity that provides a forum for mutual exchange of information and fosters international co-operation between public bodies with responsibility for promoting productivity-enhancing policies, including in undertaking joint policy analysis. It offers a platform for exchanging views, experiences and information, institutional and governance arrangements and government structures, with a view towards developing better policies. The Forum extends existing work in the OECD through a well-prioritised and coherent stream of analytical work serving the policy research needs of participants on the drivers of productivity growth.
 

Could Mexico become the new ‘China'?

Policy drivers of competitiveness and productivity You or your institution have access to this content

English
Click to Access: 
    http://oecd.metastore.ingenta.com/content/5jlvc7jvv1r2-en.pdf
  • PDF
  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/could-mexico-become-the-new-china_5jlvc7jvv1r2-en
  • READ
Author(s):
Sean Dougherty1, Octavio Escobar2
Author Affiliations
  • 1: OECD, France

  • 2: ESG Management School of Paris, France

07 July 2016
Bibliographic information
No.:
4
Pages:
29
DOI: 
10.1787/5jlvc7jvv1r2-en

Hide / Show Abstract

Over the last decade, Mexico’s unit labour costs decreased relative to other emerging markets’, especially compared to China’s. This decrease boosted Mexico’s trade competitiveness, particularly in the manufacturing sector. However, Mexico’s increasing competitiveness masks one of the country’s fundamental concerns, which is the absence of productivity improvements. The aim of this paper is two-fold: first, we examine the evolution of total factor productivity in Mexico’s manufacturing sector, as compared to China’s. Firm-level data is employed to analyse the distribution and characteristics of productivity across Mexico’s regions. Second, using regional data for the period 2005–2012, we study the policy impediments behind sluggish productivity improvements, particularly to determine how labour informality may have contributed. The study takes advantage of Mexico’s heterogeneity across regions in terms of productivity, market regulation, financial constraints and firm size to identify economic policies that can help to boost productivity in the future.
Keywords:
allocative efficiency, productivity, micro data, informality, sub-national policy analysis
JEL Classification:
  • E26: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Informal Economy ; Underground Economy
  • L25: Industrial Organization / Firm Objectives, Organization, and Behavior / Firm Performance: Size, Diversification, and Scope
  • O17: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements
  • O43: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity / Institutions and Growth
  • O54: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Latin America ; Caribbean
 
Visit the OECD web site