Foreign direct investment and labor productivity in the regional manufacturing industry
DOI:
https://doi.org/10.18381/eq.v19i1.7252Keywords:
Labor Productivity, foreign direct investment, manufacturing, MéxicoAbstract
Objective: To analyze the effects of Foreign Direct Investment (FDI) on labor productivity in the manufacturing sector in Mexico during the period 2007-2015. Methodology: Different econometric specifications are estimated by using different measures of labor productivity through the generalized method of moments, which allows to consider for possible endogeneity problems. Results: A positive and statistically significant effect of Foreign Direct Investment as a proportion of manufacturing GDP is identified on the growth rate of labor productivity calculated from the Manufacturing Labor Productivity Index. Limitations: The estimates do not consider the spatial geographic dimension between states. Originality: Previous studies in Mexico do not use a labor productivity measure based on total production or control for possible biases generated by omitted variables. Conclusions: The evidence suggests that FDI could contribute to economic development of states in Mexico by generating increases in labor productivity.Downloads
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