What is the impact of structural change on productivity? the case of mexico’s economy: 1990-2012

Abstract

This paper aims to explain productivity as a product of macro and microeconomic factors. between 1990 and 2012 in labor productivity growth. We have estimated a dynamic panel model for 62 sectors in Mexico’s economy, using the methodology developed by Arellano and Boyer (1995) and Blundell and Bond (1998). We compare Mexico to a selected group of cou ntries having a similar level of development in the mid - 1970s and having now advanced toward the new technological paradigm, and we show that structural change has been slow in Mexico and its economic structure continues to be based on previous technologic al paradigms, with particular emphasis on supplier - dominated and scale - intensive sectors, despite some promising but still incipient changes. Our econometric results demonstrate the importance of investment in physical and human capital as well as the infl uence of the macroeconomic environment with a noticeable impact of trade opening in the manufacturing productivity. From a microeconomic point of view our results show that the effect of science based and specialized suppliers is important for productivity increase, while that of supplier dominated branches which account for a one third share is negative. Another relevant result is that using information and comunication technologies technologies is not significant while producing them is. Colleagues.