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

World Bank, Washington, DC

关键词: MARKET CONCENTRATION;    INSTRUMENTAL VARIABLES;    PRODUCTIVITY;    COMPETITION;    FIRM PRODUCTIVITY;   

DOI  :  10.1596/1813-9450-9210
RP-ID  :  WPS9210

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Although market concentration is one ofthe main impediments to productivity growth globally, dataconstraints have limited its analysis to developed countriesor cross-country studies based on definitions of marketconcentration across nations and industries. This papertakes advantage of a database that is unusual bydeveloping-country standards by means of leveraging therichness of five rounds of the Mexican Manufacturing Censusbetween 1994 and 2014. The data allow estimation of theeffects of local industry concentration on productivity. Themain results show that a decline by 10 points in theHerfindahl-Hirschman index (on a 0-100 scale), a measure ofmarket concentration, explains an increase by 1 percent inthe total factor productivity of revenue. Local industryconcentration also has heterogeneous effects on productivityacross industries, while its impact on productivity variesby level of exposure to international markets. The resultshere show that the effect of greater exposure to tradeoffsets and, in most cases, reverses the negative effects oflocal concentration on productivity. These results arerobust to specifications based on the estimation of firmproductivity using the panels of establishment data from the2009 and 2014 rounds of the economic census, to controllingfor a proxy of markups, and to the use of alternateindicators of local industry concentration.