Vol. 6 Num. 1 - GCG: Revista de GlobalizaciÃ³n, Competitividad y ...

More documents

Recommendations

Info

James GerberThe data in Figure 1 do not convey the range of year-to-year variation, which has been significantfor Mexico in particular. Figures 2 and 3 show per capita GDP growth rates and perworker growth rates from 1957 to 2007, expressed as the average annual growth of themost recent five-year period. In effect, they are five-year moving averages of annual growth 8 .Using average growth over five-year periods smoothes out the data.95Figure 2: Average annual growth rate of GDP per capita,5 year moving averages, 1957-2007Source data: Heston, Summers, Aten (2009).Figure 3: Average annual growth rate of GDP per worker,5 year moving averages, 1957-2007Source data: Heston, Summers, Aten (2009).8. Averages are calculated as compound annual growth rates, g, where Y t+5= Y t(1+g) 5 .GCG GEORGETOWN UNIVERSITY - UNIVERSIA ENERO-ABRIL 2012 VOL. 6 NUM. 1 ISSN: 1988-7116pp: 91-106
Why isn’t Mexico on China’s Growth Path?96Both countries have better performance in their GDP per capita growth rates than in theirper worker rates. In part, this reflects the declining dependency ratios in both countries andthe growth of labor forces, which are faster than the growth of the overall population. A secondfeature of Figures 2 and 3 is the upward trend in China’s average annual growth rateafter approximately 1978 and the beginning of economic reforms. This shows up in both theper worker series and the per capita series. Third, Mexico’s performance in both indicatorsdeteriorates with the onset of the debt crisis and the Lost Decade in 1982. It is well knownthat growth rates after the 1980s recovered somewhat but remained far below their levels inthe 1960s and 1970s, and this is apparent in the data, as well. Fourth, Mexico’s gap betweengrowth per capita and growth per worker is sizable throughout the period of recovery in the1990s, with per worker rates falling significantly below per capita ones. Mexico in the 1990shad negative annual growth per worker with a large standard deviation (Appendix 1; García-Verdú, R., 2007, and Moreno Brid and Ros, 2009, note this as well).Some of the productivity differences between Mexico and China are related to the sectoralcomposition of GDP. In 2009, China’s manufacturing sector accounted for 34 percent of GDPon a value added basis, while Mexico’s was half that at only 17 percent. Similarly, servicesin China contributed 43 percent of GDP, while in Mexico they were 61 percent (World Bank,2011). China’s relatively larger manufacturing sector and smaller services sector means thatmore workers are employed in areas of the economy where it is relatively easier to raiseproductivity and fewer workers where it is more difficult. This is particularly the case whenconsidering Mexico’s many small, low value added retailers that have absorbed a significantamount of both urban and rural labor. And finally, while it is the case that China’s agriculturalsector is much larger (10 percent of GDP in 2009, compared to 4 percent in Mexico), the lastthree decades of declines in the relative importance of agriculture also favor China, since itbegan from a much larger base (30 percent of GDP in 1980 versus 9 percent in Mexico) andhas been able to free up a sizable amount of low-productivity labor for employment in themuch higher value added sectors of construction and manufacturing (World Bank, 2011).3. Growth accountingIn this section, a standard Solow growth model is used to analyze the patterns in Figures 2and 3. As a first approximation, output growth can be attributed to either factor accumulation(more capital and more labor) or to total factor productivity (more efficient use of inputs)or to some combination of the two. Increases in capital and labor, or more precisely, capitalper worker and labor skills, is relatively easy to understand conceptually; increases in theefficiency of inputs is more difficult to specify concretely, and has a relatively wide range ofinterpretations. Easterly and Levine (2001) summarize the literature, noting that total factorproductivity may reflect changes in technology, the role of externalities, changes in the sectoralcomposition of output, or the adoption of lower cost production methods. Empiricalwork that explores the relative importance of each of these factors across a sample of countriesor through time is lacking.GCG GEORGETOWN UNIVERSITY - UNIVERSIA ENERO-ABRIL 2012 VOL. 6 NUM. 1 ISSN: 1988-7116pp: 91-106
Page 2 and 3:
CARTA DEL EDITOR IN CHIEFEditor in
Page 5 and 6:
StaffDe la Torre, José, Dean, Chap
Page 7 and 8:
Staff2. MULTINACIONALES, INVERSIÓN
Page 9 and 10:
SELECCIÓN PROCEDURE PROCEDIMENTOIN
Page 11 and 12:
Instrucciones para Autores y Proced
Page 14:
INDEXACIÓN INDEXING INDEXAÇÃOInd
Page 17 and 18:
Economic Relationships between Lati
Page 19 and 20:
Page 21:
Page 24 and 25:
Miguel A. MontoyaThe rest of the pa
Page 27 and 28:
International Joint Ventures among
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
36Japanese Foreign Direct Investmen
Page 37 and 38:
Japanese Foreign Direct Investment
Page 39 and 40:
Page 41 and 42:
Page 43 and 44: Japanese Foreign Direct Investment
Page 55 and 56: 561. IntroductionClusters and indus
Page 57 and 58: Entrepreneurial Clusters in China a
Page 91 and 92: 921. Introduction: Mexico and China
Page 93: Why isn’t Mexico on China’s Gro
Page 97 and 98: Why isn’t Mexico on China’s Gro
Page 107 and 108: 1081. IntroductionChina and Latin A
Page 109 and 110: Promote China-Latin American Relati
Page 115 and 116: 1161. A Brief History of Economic r
Page 117 and 118: Building the New Silk Road across t
Page 132 and 133: Zhu HongboIn fact, some Latin Ameri
Page 134 and 135: Zhu Hongbo5. Conclusions135China an
Page 136 and 137: 1. Introduction137China’s emergen
Page 138 and 139: Edy WongTable One: Compositions of
Page 140 and 141: Edy WongTable 2: China’s R & D Ex
Page 142 and 143: Edy Wongon ‘new economic geograph
Page 144 and 145:
Edy WongIn today’s global market,
Page 146 and 147:
Edy Wongdemand-side factors in the
Page 148 and 149:
Edy Wongterms of quality, reliabili
Page 150 and 151:
Edy Wongindustry. Second, value cha
Page 152 and 153:
Edy Wongconsumption of Western luxu
Page 154:
Edy WongReferences155Child, J.; Rod
show all

Vol. 6 Num. 1 - GCG: Revista de GlobalizaciÃ³n, Competitividad y ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?