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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

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