The Emergence of Successful Export Activities in Mexico: Three Case Studies

This paper consists of three case studies of the emergence of three successful export activities in Mexico: avocado production, the manufacture of catheters, and call center outsourcing. Each case study discusses how companies, associations, and governments at various levels have addressed market failures and facilitated the provision of public goods necessary for each activity. The case studies additionally profile first movers in each activity and describe the positive externalities they provide to imitators, particularly diffusion of export knowledge. Also include in each case study is a counterfactual case of a less successful activity (mangos, stem cell banking, and other types of business process outsourcing, respectively) and a section on policy implications.Agriculture, Exports, Manufacturing, Services, Mexico

Regulatory reform, competition, and innovation - a case study of the Mexican road freight industry

Discussions of competition and regulatory reform typically focus on price and quantity effects. But improving certain infrastructure services can also stimulate entry, and competition in user industries downstream, allowing new firms to enter, incumbent users to offer new products, and rivalry to intensify. The authors present a case study of how innovations in road freight services affect selected downstream users of those services after regulatory reform. After a period of rigid regulation, and heavy government interference, Mexico in 1989 developed a new policy framework for road transport, with free entry, and market-based price setting. The result: faster, more reliable trucking has allowed user companies to offer new, previously unavailable products, and to reach new areas with existing products. Cheaper, more customer-responsive trucking services have allowed logistical innovations in user firms, and some user firms have decided not to keep their own fleets of trucks, but to outsource trucking services on the open market, thereby converting fixed costs to variable costs. For one fertilizer company, the benefits of reform included a ten percent improvement in operating margin. Successful reform requires careful planning and execution, and political support at high levels. Regulatory reform also profoundly changes the sectoral institution formerly responsible for the regulation. Enough resources should be provided to help organizations in the reformed industry make the transition to the post-reform environment - helping with such tasks as defining the organization's new role, and facilitating the redeployment of staff. The national competition agency can help greatly in laying the groundwork for reform by making a compelling case for the reform's expected benefits. After reform, the competition agency should also help with enforcement, to ensure that the cozy, cartel-like behavior stimulated by tight entry restrictions does not persist. In Mexico, three strong interventions were required to discipline attempted anti-competitive practices in the trucking industry in the years following reform.Common Carriers Industry,Environmental Economics&Policies,Roads&Highways,Transport and Trade Logistics,Banks&Banking Reform,Roads&Highways,Transport and Trade Logistics,Common Carriers Industry,ICT Policy and Strategies,Environmental Economics&Policies

Innovative experiences in access to finance : market friendly roles for the visible hand ?

Interest in access to finance has increased significantly in recent years, as growing evidence suggests that lack of access to credit prevents lower-income households and small firms from financing high return investment projects, having an adverse effect on growth and poverty alleviation. This study describes some recent innovative experiences to broaden access to credit. These experiences are consistent with an emerging new view that recognizes a limited role for the public sector in financial markets, but contends that there might be room for well-designed, restricted interventions in collaboration with the private sector to foster financial development and broaden access. The authors illustrate this view with several recent experiences inLatin America and then discuss some open policy questions about the role of the public and private sectors in driving these financial innovations.Debt Markets,Banks&Banking Reform,,Emerging Markets,Bankruptcy and Resolution of Financial Distress

Pesticide Regulation Under NAFTA: Harmonization in Process?

Different standards in pesticides and pest protection have often been used as trade barriers, whether real or manufactured. While harmonization is often touted as a means to limit the ability of domestic (protectionist) interests to use standards as a barrier to trade, the process of harmonization itself is subject to rent-seeking. In this paper, we explore the harmonization of standards that affect pesticide use in NAFTA and ask whether the process is benefiting any groups more than others. There is evidence that patented pesticide producers have greater access to the harmonization process and may be using harmonization to raise costs to their rivals while preserving their ability to price discriminate.International Relations/Trade,

Global Mobility of Talent from a Perspective of New Industrial Policy: Open Migration Chains and Diaspora Networks

economic development, diaspora networks, search networks, serendipity

La política industrial en América Latina y el Caribe a comienzos del siglo

(Disponible en idioma inglés únicamente) Este sondeo de políticas industriales en América Latina y el Caribe presenta dos afirmaciones básicas: (1) el período desde finales de los años 80 y todos los 90 fue de transición de las políticas industriales del modelo de sustitución de importaciones hacia políticas industriales adecuadas para economías nacionales abiertas en una economía mundial más cohesionada; y (2) que este período de transición no ha terminado y, por ende, es prematuro emitir juicios sobre la eficacia de este conjunto, aún emergente, de políticas.

Improving Russia's policy on foreign direct investment

Foreign direct investment brings host countries capital, productive facilities, and technology transfers as well as employment, new job skills, and management expertise. It is important to the Russian Federation, where incentives for competition are limited and incentives to becoming efficient are blunted by interregional barriers to trade, weak creditor rights, and administrative barriers to new entrants. The authors ague that the old policy paradigm of foreign direct investment (established before World War II and prevalent in the 1950s and 1960s) still governs Russia. In this paradigm there are only two reasons for foreign direct investment: access to inputs for production and access to markets for outputs. Such kinds of foreign direct investment, although beneficial, are often based on generating exports that exploit cheap labor or natural resources, or are aimed at penetrating protected local markets, not necessarily at world standards for price and quality. They contend that Russia should phase out high tariffs and non-tariff protection for the domestic market, most tax preferences for foreign investors (which don't increase foreign direct investment but do reduce fiscal revenues), and many restrictions on foreign investment. They recommend that Russia switch to a modern approach to foreign direct investment by: 1) Amending the newly enacted foreign direct investment law so that it will grant non-discriminatory"national treatment"to foreign investors for both right of establishment, and post-establishment operations, abolish conditions (such as local content restrictions) inconsistent with the World Trade Organization agreement on trade-related investment measures (TRIMs), and make investor-state dispute resolution mechanisms more efficient (giving foreign investors the chance to seek neutral binding international arbitration, for example). 2) Strengthening enforcement of property rights. 3) Simplifying registration procedures for foreign investors, to make them transparent and rules-based. 4) Extending guarantee schemes covering basic non-commercial risks.Environmental Economics&Policies,Labor Policies,International Terrorism&Counterterrorism,Economic Theory&Research,Payment Systems&Infrastructure,Environmental Economics&Policies,Foreign Direct Investment,Economic Theory&Research,National Governance,International Terrorism&Counterterrorism

Economic structure, productivity, and infrastructure quality in southern Mexico

There are large and sustained differences in the economic performance of sub-national regions in most countries. The authors examine the economic structure and productivity in Southern Mexico and compare it with the rest of the country. The authors use firm level data from Mexican manufacturing to test the relative importance of firm level characteristics (such as human capital and technology adoption) compared with external characteristics (such as infrastructure quality and regulatory environment) in explaining productivity differentials. The authors find that the economic structure of Southern Mexico is considerably different from the rest of the country, with the economic landscape dominated by micro enterprises and a relative specialization in low productivity activities. This, coupled with low skill levels and fewer skill upgrading opportunities, reduces the performance of Southern firms. Productivity differentials between Southern firms and others, however, only exist for micro enterprises. The econometric analysis shows that while employee training and technology adoption enhance productivity, access to markets by improving transport infrastructure that link urban areas also have important productivity effects.Labor Policies,Economic Theory&Research,Municipal Financial Management,Environmental Economics&Policies,Banks&Banking Reform,Environmental Economics&Policies,Economic Theory&Research,Banks&Banking Reform,Municipal Financial Management,Microfinance

Defining And Measuring Green FDI: An Exploratory Review Of Existing Work And Evidence

This paper was developed at the request of the OECD Working Party of the Investment Committee to document efforts to date to define and measure green FDI and to investigate the practicability of various possible definitions, as well as to identify investment policy restrictions to green FDI. It does so by reviewing the literature and existing work on the contributions of FDI to the environment; by providing a two-part definition of green FDI; and by discussing various assumptions necessary to estimate the magnitude of \u27green\u27 FDI

A history of emerging domestic markets

The Milken Institute’s Center for Emerging Domestic Markets has been a leader in researching and writing about the issue of expanding investment in traditionally undervalued and undercapitalized entrepreneurs, enterprises and communities, including women and ethnic business owners, urban cores, rural areas and low-income populations. This article traces the evolution of the emerging domestic market concept and provides a guide to the existing literature.Business enterprises ; Markets