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Labor congestion in the automotive cluster: the role of wages

Alfonso Mendoza-Velazquez (Centro de Investigación e Inteligencia Económica, Universidad Popular Autónoma del Estado de Puebla, Puebla, Mexico)
José Antonio Santillana (Centro de Investigación y Posgrados, Universidad Popular Autónoma del Estado de Puebla, Puebla, Mexico)
Viviana Elizabeth Zárate-Mirón (Centro de Investigación e Inteligencia Económica, Universidad Popular Autónoma del Estado de Puebla, Puebla, Mexico)
Martha Cabanas (Centro de Investigación y Posgrados, Universidad Popular Autónoma del Estado de Puebla, Puebla, Mexico)

Competitiveness Review

ISSN: 1059-5422

Article publication date: 16 July 2018

Abstract

Purpose

The purpose of this study is to investigate labor congestion in the automotive industry in Mexico.

Design/methodology/approach

By using the cluster and subcluster definitions by Delgado et al. (2016) and relying on an efficiency and production function perspective, this study estimates a standard production function and measures marginal returns of labor at the regional cluster and subclusters levels. To assess whether wages affect the finding of congestion and productivity, the model also measures the individual impact of wages on both total productivity and marginal returns of labor.

Findings

Among other results, this paper finds evidence of labor congestion in the automotive cluster in Mexico. This congestion deepens with wages and it is specific to some regions and some subclusters.

Research limitations/implications

The methods used are based on panel data techniques but are fundamentally cross-section in nature. The time period available may condition these findings.

Originality/value

To the authors’ knowledge, this is the first study reporting congestion in the automotive cluster in Mexico.

Keywords

Citation

Mendoza-Velazquez, A., Santillana, J.A., Zárate-Mirón, V.E. and Cabanas, M. (2018), "Labor congestion in the automotive cluster: the role of wages", Competitiveness Review, Vol. 28 No. 4, pp. 386-407. https://doi.org/10.1108/CR-10-2016-0071

Publisher

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Emerald Publishing Limited

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