IDEAS home Printed from https://ideas.repec.org/p/emc/wpaper/dte588.html
   My bibliography  Save this paper

Estimating the Technical Efficiency of Mexican States

Author

Listed:
  • Antonio Álvarez-Pinilla

    (Division of Economics, CIDE)

  • Rafael Garduño-Rivera
  • Héctor M. Núñez

    (Division of Economics, CIDE)

Abstract

In this paper we estimate the technical efficiency of Mexican states using several stochastic production frontier models. The empirical section uses panel data over the period 1988-2008. A distinctive feature of the paper is to use socioeconomic and location data in order to control for the heterogeneity of the states. We find that inefficiency explains part of the difference in production across regions, which is not accounted by other explanatory variables. Our results show that infrastructure, education, productive specialization and the presence of oil production shift the production frontier upwards. Additionally, northern states are more efficient than the rest of the country.

Suggested Citation

  • Antonio Álvarez-Pinilla & Rafael Garduño-Rivera & Héctor M. Núñez, 2015. "Estimating the Technical Efficiency of Mexican States," Working Papers DTE 588, CIDE, División de Economía.
    • Handle: RePEc:emc:wpaper:dte588
    as

    Download full text from publisher

    File URL: http://www.economiamexicana.cide.edu/RePEc/emc/pdf/DTE/DTE588.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chiquiar, Daniel, 2008. "Globalization, regional wage differentials and the Stolper-Samuelson Theorem: Evidence from Mexico," Journal of International Economics, Elsevier, vol. 74(1), pages 70-93, January.
    2. Reifschneider, David & Stevenson, Rodney, 1991. "Systematic Departures from the Frontier: A Framework for the Analysis of Firm Inefficiency," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 715-723, August.
    3. Frauke G. Braun & Astrid Cullmann, 2011. "Regional Differences of Production and Efficiency of Mexican Manufacturing: An Application of Nested and Stochastic Frontier Panel Models," Journal of Developing Areas, Tennessee State University, College of Business, vol. 45(1), pages 291-311, July-Dece.
    4. Aschauer, David Alan, 1989. "Does public capital crowd out private capital?," Journal of Monetary Economics, Elsevier, vol. 24(2), pages 171-188, September.
    5. Chávez Juan Carlos & Fonseca Felipe J., 2012. "Technical and Structural Efficiency in Mexican Manufacturing: A Regional Approach," Working Papers 2012-03, Banco de México.
    6. Bannister, Geoffrey J. & Stolp, Chandler, 1995. "Regional concentration and efficiency in Mexican manufacturing," European Journal of Operational Research, Elsevier, vol. 80(3), pages 672-690, February.
    7. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-286, July.
    8. Caudill, Steven B & Ford, Jon M & Gropper, Daniel M, 1995. "Frontier Estimation and Firm-Specific Inefficiency Measures in the Presence of Heteroscedasticity," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(1), pages 105-111, January.
    9. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    10. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Álvarez, Antonio & Garduño, Rafael & Núñez, Héctor, 2016. "Modelling the effect of crime on economic activity: The case of Mexican states," Efficiency Series Papers 2016/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    2. Antonio Alvarez & Rafael Garduño-Rivera & Hector M. Nuñez, 2017. "Mexico's North-South divide: The regional distribution of state inefficiency 1988–2008," Papers in Regional Science, Wiley Blackwell, vol. 96(4), pages 843-858, November.
    3. Alejandro U. Becerra-Ornelas & Hector M. Nuñez, 2019. "The technical efficiency of local economies in Mexico: a failure of decentralized public spending," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 62(2), pages 247-264, April.
    4. Alejandro U. Becerra Ornelas & Héctor M. Núñez, 2017. "Stochastic Frontiers and Technical Efficiency of Local Public Expenditure in Mexico," Working Papers DTE 603, CIDE, División de Economía.
    5. Christopher F. Parmeter & Hung-Jen Wang & Subal C. Kumbhakar, 2017. "Nonparametric estimation of the determinants of inefficiency," Journal of Productivity Analysis, Springer, vol. 47(3), pages 205-221, June.
    6. Deng, Yaguo, 2024. "A Bayesian semi-parametric approach to stochastic frontier models with inefficiency heterogeneity," DES - Working Papers. Statistics and Econometrics. WS 43837, Universidad Carlos III de Madrid. Departamento de Estadística.
    7. J. Griffin, 2011. "Bayesian clustering of distributions in stochastic frontier analysis," Journal of Productivity Analysis, Springer, vol. 36(3), pages 275-283, December.
    8. Young Hoon Lee, 2009. "Frontier Models and their Application to the Sports Industry," Working Papers 0903, Nam Duck-Woo Economic Research Institute, Sogang University (Former Research Institute for Market Economy), revised 2009.
    9. Badunenko, Oleg & D’Inverno, Giovanna & De Witte, Kristof, 2023. "On distinguishing the direct causal effect of an intervention from its efficiency-enhancing effects," European Journal of Operational Research, Elsevier, vol. 310(1), pages 432-447.
    10. Antti Saastamoinen, 2015. "Heteroscedasticity Or Production Risk? A Synthetic View," Journal of Economic Surveys, Wiley Blackwell, vol. 29(3), pages 459-478, July.
    11. Larson, Donald F. & Plessmann, Frank, 2009. "Do farmers choose to be inefficient? Evidence from Bicol," Journal of Development Economics, Elsevier, vol. 90(1), pages 24-32, September.
    12. Giannis Karagiannis, 2005. "Explaining output growth with a heteroscedastic non-neutral production frontier: the case of sheep farms in Greece," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 32(1), pages 51-74, March.
    13. Francesco Aiello & Camilla Mastromarco & Angelo Zago, 2011. "Be productive or face decline. On the sources and determinants of output growth in Italian manufacturing firms," Empirical Economics, Springer, vol. 41(3), pages 787-815, December.
    14. Holtkamp, A.M. & Brummer, B., 2018. "Environmental efficiency of smallholder rubber production," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277518, International Association of Agricultural Economists.
    15. Jorge Galán & Helena Veiga & Michael Wiper, 2014. "Bayesian estimation of inefficiency heterogeneity in stochastic frontier models," Journal of Productivity Analysis, Springer, vol. 42(1), pages 85-101, August.
    16. Antonio Alvarez & Christine Amsler & Luis Orea & Peter Schmidt, 2006. "Interpreting and Testing the Scaling Property in Models where Inefficiency Depends on Firm Characteristics," Journal of Productivity Analysis, Springer, vol. 25(3), pages 201-212, June.
    17. Seunghwa Rho & Peter Schmidt, 2015. "Are all firms inefficient?," Journal of Productivity Analysis, Springer, vol. 43(3), pages 327-349, June.
    18. Christine Amsler & Peter Schmidt & Wen-Jen Tsay, 2015. "A post-truncation parameterization of truncated normal technical inefficiency," Journal of Productivity Analysis, Springer, vol. 44(2), pages 209-220, October.
    19. Kashiwagi, Kenichi & Mtimet, Nadhem & Zaibet, Lokman & Nagaki, Masakazu, 2010. "Technical efficiency of olive oil manufacturing and efficacy of modernization programme in Tunisia," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96195, African Association of Agricultural Economists (AAAE).
    20. Dipanwita Sarkar & Trevor C. Collier, 2019. "Does host-country education mitigate immigrant inefficiency? Evidence from earnings of Australian university graduates," Empirical Economics, Springer, vol. 56(1), pages 81-106, January.

    More about this item

    Keywords

    Regional efficiency; stochastic frontier; state characteristics; panel data.;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:emc:wpaper:dte588. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mateo Hoyos (email available below). General contact details of provider: https://edirc.repec.org/data/cideemx.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.