Multifactor Productivity and its Determinants: Al Empirical Analysis for Mexican Manufacturing.

We use data from the Annual Industrial Survey for 1996-2003. First, we estimate production functions by means of growth accounting exercises and panel data econometrics for the whole sector and for 14 comprehensive groups. Various measures of Multifactor Productivity (MFP) are constructed, as we consider diverse combinations of inputs with capital, labour, electricity and transport. This allows us to compare MFP growth rates between groups. Second, we analyse econometrically some of the determinants of MFP and Labour Productivity (LP) growth. We find that, on the one hand, there is some evidence of a positive relationship between market concentration and technology adoption; on the other hand, both technology adoption and human capital seem to be promoting productivity, whilst market concentration is exerting a negative influence on it. In sum, our results suggest that, once controlling for the effect on technology adoption, more concentration (conversely, less competition) has a negative impact on productivity.Panel data, Productivity, Manufacturing, Competition

Translog Cost Functions: An Application for Mexican Manufacturing.

We use translog cost functions to estimate own-price and substitution elasticities of input demands, economies of scale and average costs in Mexican manufacturing. Data from the Mexican Annual Industrial Survey is used for 1996, 2000 and 2003. We show that a model that allows for nonhomotheticity and nonunitary elasticities of substitution is appropriate to represent the production structure. Allen-Uzawa elasticities indicate the existence of substitution possibilities amongst inputs. The demand for electricity is essentially unitary elastic. All cross-price elasticities are less than one. Both scale economies and average costs diminish as the size of activity class increases. Economies of scale increased for any level of output. The differences in average costs between small and large activity classes were reduced and some disparities prevail in a number of manufacturing groups.Simultaneous equation models, Translog cost function, Manufacturing