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Productivity in Mexico: Trends, Drivers and Institutional Framework

Author

Listed:
  • José Ernesto López Córdova
  • Juan Rebolledo Márquez Padilla

Abstract

Over the past three decades, economic growth in Mexico has been lackluster, with declining multifactor productivity as the main culprit. Mexico’s growth malaise stems not only from existing barriers to the productivity of labour and capital, but also, to a large extent, from a misallocation of both inputs. This is epitomized by a large informal labour market and by a financially-underserved private sector. Factor misallocation has generated large productivity gaps between sectors and regions. In particular, a process of structural transformation that mobilizes resources toward high-productivity activities has unfolded slowly. To spur economic growth, the Mexican Government has placed productivity at the center of the policy agenda, not only by enacting a wide array of productivity-enhancing structural reforms, but also by establishing an institutional framework conducive to the design and implementation of public policies that address existing bottlenecks.

Suggested Citation

  • José Ernesto López Córdova & Juan Rebolledo Márquez Padilla, 2016. "Productivity in Mexico: Trends, Drivers and Institutional Framework," International Productivity Monitor, Centre for the Study of Living Standards, vol. 30, pages 28-42, Spring.
  • Handle: RePEc:sls:ipmsls:v:30:y:2016:2
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    File URL: http://www.csls.ca/ipm/30/cordovaandpadilla.pdf
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    References listed on IDEAS

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    1. Christian Daude & Eduardo Fernandez-Arias, 2010. "On the Role of Productivity and Factor Accumulation in Economic Development in Latin America and the Caribbean," Research Department Publications 4653, Inter-American Development Bank, Research Department.
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    3. Arias-Vazquez, Francisco Javier & Azuara, Oliver & Bernal, Pedro & Heckman, James J. & Villarreal, Cajeme, 2010. "Policies to Promote Growth and Economic Efficiency in Mexico," IZA Discussion Papers 4740, Institute of Labor Economics (IZA).
    4. Margaret S. McMillan & Dani Rodrik, 2011. "Globalization, Structural Change and Productivity Growth," NBER Working Papers 17143, National Bureau of Economic Research, Inc.
    5. World Bank, 2015. "World Development Indicators 2015," World Bank Publications - Books, The World Bank Group, number 21634.
    6. Matias Busso & Maria Victoria Fazio & Santiago Levy Algazi, 2012. "(In)Formal and (Un)Productive: The Productivity Costs of Excessive Informality in Mexico," Research Department Publications 4789, Inter-American Development Bank, Research Department.
    7. Christian Daude, 2010. "Innovation, Productivity and Economic Development in Latin America and the Caribbean," OECD Development Centre Working Papers 288, OECD Publishing.
    8. Christian Daude & Eduardo Fernandez-Arias, 2010. "On the Role of Productivity and Factor Accumulation in Economic Development in Latin America and the Caribbean," Research Department Publications 4653, Inter-American Development Bank, Research Department.
    9. Gary Banks, 2015. "Institutions to Promote Pro-Productivity Policies: Logic and Lessons," OECD Productivity Working Papers 1, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Rodríguez-Castelán, Carlos & López-Calva, Luis Felipe & Barriga-Cabanillas, Oscar, 2023. "Market concentration, trade exposure, and firm productivity in developing countries: Evidence from Mexico," World Development, Elsevier, vol. 165(C).

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    More about this item

    Keywords

    Mexico; Productivity; Labour Productivity; Capital Productivity; Multifactor Productivity;
    All these keywords.

    JEL classification:

    • N36 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Latin America; Caribbean
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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