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Article
Publication date: 17 July 2017

Alfonso Mendoza-Velazquez

This study investigates the existence of Marshall, Jacob and Porter’s type of externalities in Mexico. We measure the impact of industrial specialization, competition and…

Abstract

Purpose

This study investigates the existence of Marshall, Jacob and Porter’s type of externalities in Mexico. We measure the impact of industrial specialization, competition and diversity on employment growth for the period 2004 to 2008.

Design/methodology/approach

The analysis is based on data from 41 highly dynamic industrial clusters originally obtained by applying Porter’s (1998) methodology. We use a cross-section specification estimated via instrumental variables and two-stage least square estimation (2SLS) to control for endogeneity.

Findings

On average, we find that industrial specialization exerts a negative impact on employment growth within states and within clusters, indicating that traded industries in Mexico carry very little innovation, operate in early stages of the life cycle, face high costs of employment reassignation or exhibit low adaptability. A negative impact of specialization on employment conforms with Jacobs (1969) type of externalities and confirms what other studies have found in France (Combes, 2000), Korea (Lee et al., 2005) and the USA (Delgado et al., 2014). The authors also find that competition generates more employment.

Research limitations/implications

Industrial data at the sub-branch level were obtained from the Economic Census (EC) of the National Institute of Geography and Statistics (INEGI). The EC information for 2004 was still not fully compatible with the North America Industry Classification System (NAICS), with 262 of the 309 data at the fourth-digit level aligned to the USA. In addition, industrial information from the EC is recorded every four years, which prevents this study to use panel data techniques and it makes it impossible to use time series methods.

Practical implications

Policymakers can clearly identify competition forces having a significant impact on employment growth. This can orient policymakers to implement measures to encourage the development of some of these clusters, as well as to identify some of the sources that drive specialization, competition and diversity.

Originality/value

This paper contributes to the debate on the existence of Marshallian (MAR), Jacobian and Porter externalities. This is the first study using the definition of traded clusters in Mexico, which allows the authors to identify how specialization, competition and diversity forces drive the dynamics of regional employment growth.

Details

Competitiveness Review: An International Business Journal, vol. 27 no. 4
Type: Research Article
ISSN: 1059-5422

Keywords

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Article
Publication date: 16 July 2018

Alfonso Mendoza-Velazquez, José Antonio Santillana, Viviana Elizabeth Zárate-Mirón and Martha Cabanas

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

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.

Details

Competitiveness Review: An International Business Journal, vol. 28 no. 4
Type: Research Article
ISSN: 1059-5422

Keywords

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Article
Publication date: 20 May 2019

Mathieu Resbeut, Philippe Gugler and Danuvasin Charoen

The paper aims to investigate the role of specialization and agglomeration forces on industry performance in an emerging market, namely, Thailand. In particular, the…

Abstract

Purpose

The paper aims to investigate the role of specialization and agglomeration forces on industry performance in an emerging market, namely, Thailand. In particular, the impact of clusters and the influence of complexity will be tackled.

Design/methodology/approach

The methodology used is based on the work of Delgado et al. (2014). Industries and clusters are assigned to a certain category according to their respective level of specialization and complexity. Performance measures are then computed for each category.

Findings

It was found that the agglomeration of similar industries and co-located and related industries increase the performance of firms in terms of gross output per employee and remuneration per employee. Moreover, the increase of performance induced by the complexity level of an industry was closely related to the level of specialization.

Originality/value

Building on a cluster mapping, this study brings new insight on the effect of specialization and agglomeration on performance in emerging markets. In fact, the paper show how performance can be enhanced in less sophisticated and developed economies.

Details

Competitiveness Review: An International Business Journal , vol. 29 no. 3
Type: Research Article
ISSN: 1059-5422

Keywords

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