Patterns of TFP growth in Mexico: 1991–2011

• Published in: The North American journal of economics and finance Vol. 34; pp. 398 - 420
• Main Authors: Torre Cepeda, Leonardo E., Ramos, Luis Fernando Colunga
• Format: Journal Article
• Language: English
• Published: Greenwich Elsevier Inc 01-11-2015; Elsevier Science Ltd
• Subjects: China; Correlation analysis; Economic concentration; Economic growth; Growth accounting; Mexico; NAFTA; Productivity; Productivity growth; Regional economic growth; Studies; Mexico; Mexico; NAFTA; Productivity growth; Growth accounting; China; Regional economic growth
• ISSN: 1062-9408; 1879-0860
• DOI: 10.1016/j.najef.2015.09.007

We review the behavior total factor productivity (TFP) growth in the Mexican economy during the period 1991–2011 using a new data set recently published by INEGI. Our analysis shows that TFP has had a negative contribution to output growth, although its traditional positive link with output growth is still present. The data also indicate that TFP growth in Mexico is highly concentrated and unstable, as there is just a handful of industrial branches that at any given moment account for most of the TFP growth observed, but that rarely remain at the top over time. The patterns identified here – low growth, concentration, and unsteadiness of TFP – are in accordance with what has been found using other data sets for the Mexican economy, and also with those that have been reported for other economies at different levels of aggregation.