The Effects of Local Market Concentration and International Competition on Firm Productivity : Evidence from Mexico

Although market concentration is one of the main impediments to productivity growth globally, data constraints have limited its analysis to developed countries or cross-country studies based on definitions of market concentration across nations and industries. This paper takes advantage of a da...

Full description

Bibliographic Details
Main Authors:	Rodriguez-Castelan, Carlos, Lopez-Calva, Luis Felipe, Barriga Cabanillas, Oscar
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	MARKET CONCENTRATION INSTRUMENTAL VARIABLES PRODUCTIVITY COMPETITION FIRM PRODUCTIVITY MANUFACTURING CENSUS
Online Access:	http://documents.worldbank.org/curated/en/792001586453892128/The-Effects-of-Local-Market-Concentration-and-International-Competition-on-Firm-Productivity-Evidence-from-Mexico http://hdl.handle.net/10986/33604

id	okr-10986-33604
recordtype	oai_dc
spelling	okr-10986-336042022-09-20T00:13:19Z The Effects of Local Market Concentration and International Competition on Firm Productivity : Evidence from Mexico Rodriguez-Castelan, Carlos Lopez-Calva, Luis Felipe Barriga Cabanillas, Oscar MARKET CONCENTRATION INSTRUMENTAL VARIABLES PRODUCTIVITY COMPETITION FIRM PRODUCTIVITY MANUFACTURING CENSUS Although market concentration is one of the main impediments to productivity growth globally, data constraints have limited its analysis to developed countries or cross-country studies based on definitions of market concentration across nations and industries. This paper takes advantage of a database that is unusual by developing-country standards by means of leveraging the richness of five rounds of the Mexican Manufacturing Census between 1994 and 2014. The data allow estimation of the effects of local industry concentration on productivity. The main results show that a decline by 10 points in the Herfindahl-Hirschman index (on a 0-100 scale), a measure of market concentration, explains an increase by 1 percent in the total factor productivity of revenue. Local industry concentration also has heterogeneous effects on productivity across industries, while its impact on productivity varies by level of exposure to international markets. The results here show that the effect of greater exposure to trade offsets and, in most cases, reverses the negative effects of local concentration on productivity. These results are robust to specifications based on the estimation of firm productivity using the panels of establishment data from the 2009 and 2014 rounds of the economic census, to controlling for a proxy of markups, and to the use of alternate indicators of local industry concentration. 2020-04-16T19:11:57Z 2020-04-16T19:11:57Z 2020-04 Working Paper http://documents.worldbank.org/curated/en/792001586453892128/The-Effects-of-Local-Market-Concentration-and-International-Competition-on-Firm-Productivity-Evidence-from-Mexico http://hdl.handle.net/10986/33604 English Policy Research Working Paper;No. 9210 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Mexico
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	MARKET CONCENTRATION INSTRUMENTAL VARIABLES PRODUCTIVITY COMPETITION FIRM PRODUCTIVITY MANUFACTURING CENSUS
spellingShingle	MARKET CONCENTRATION INSTRUMENTAL VARIABLES PRODUCTIVITY COMPETITION FIRM PRODUCTIVITY MANUFACTURING CENSUS Rodriguez-Castelan, Carlos Lopez-Calva, Luis Felipe Barriga Cabanillas, Oscar The Effects of Local Market Concentration and International Competition on Firm Productivity : Evidence from Mexico
geographic_facet	Latin America & Caribbean Mexico
relation	Policy Research Working Paper;No. 9210
description	Although market concentration is one of the main impediments to productivity growth globally, data constraints have limited its analysis to developed countries or cross-country studies based on definitions of market concentration across nations and industries. This paper takes advantage of a database that is unusual by developing-country standards by means of leveraging the richness of five rounds of the Mexican Manufacturing Census between 1994 and 2014. The data allow estimation of the effects of local industry concentration on productivity. The main results show that a decline by 10 points in the Herfindahl-Hirschman index (on a 0-100 scale), a measure of market concentration, explains an increase by 1 percent in the total factor productivity of revenue. Local industry concentration also has heterogeneous effects on productivity across industries, while its impact on productivity varies by level of exposure to international markets. The results here show that the effect of greater exposure to trade offsets and, in most cases, reverses the negative effects of local concentration on productivity. These results are robust to specifications based on the estimation of firm productivity using the panels of establishment data from the 2009 and 2014 rounds of the economic census, to controlling for a proxy of markups, and to the use of alternate indicators of local industry concentration.
format	Working Paper
author	Rodriguez-Castelan, Carlos Lopez-Calva, Luis Felipe Barriga Cabanillas, Oscar
author_facet	Rodriguez-Castelan, Carlos Lopez-Calva, Luis Felipe Barriga Cabanillas, Oscar
author_sort	Rodriguez-Castelan, Carlos
title	The Effects of Local Market Concentration and International Competition on Firm Productivity : Evidence from Mexico
title_short	The Effects of Local Market Concentration and International Competition on Firm Productivity : Evidence from Mexico
title_full	The Effects of Local Market Concentration and International Competition on Firm Productivity : Evidence from Mexico
title_fullStr	The Effects of Local Market Concentration and International Competition on Firm Productivity : Evidence from Mexico
title_full_unstemmed	The Effects of Local Market Concentration and International Competition on Firm Productivity : Evidence from Mexico
title_sort	effects of local market concentration and international competition on firm productivity : evidence from mexico
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/792001586453892128/The-Effects-of-Local-Market-Concentration-and-International-Competition-on-Firm-Productivity-Evidence-from-Mexico http://hdl.handle.net/10986/33604
_version_	1764479124318978048

The Effects of Local Market Concentration and International Competition on Firm Productivity : Evidence from Mexico

Similar Items