Productive specialization and the divergence in productivity: The case of Mexico, 1982-2006

Abstract

This paper studies the productivity performances of Mexico in international perspective during the period 1982-2006. Mexico adopted a policy of economic liberalisation coupled by some market oriented structural reforms, after a long period of import substitution. However, growth in GDP per capita has been low. Comparing the Mexican economic performance with those of other more developed and developing economies one can observe the divergence of both GDP per capita and labour productivity, in relation to the OECD member countries and other Latin American economies. Productive and commercial specialisation has geared towards activities associated with global value chains that demand and incorporate very little local technological value and have not necessarily translated into forward and backward linkages with the rest of the economy. There is a significant change in the composition of both output and labour among sectors, and within them; the more dynamic sectors are those featuring a relatively lower productivity. Sectors oriented to the less dynamic domestic markets, feature a high and growing technological heterogeneity. Leading firms in these sectors record significant productivity growth, thereby increasing productivity gaps among industries and sectors of economic activity. Clearly, best productive and technology practices fail to diffuse across industries and the informal sector of the economy is increased.