Spatial patterns and determinants of industrial regional growth in Mexico, 1993--2003: Implications for regional planning and public policy

This research investigates industrial regional growth and its determinants in Mexico from 1993 to 2003. Strategies of local economic development, usually based on industrial promotion, require knowing main determinants of industrial regional growth. The case study shows that there is no variable with a systematically strong effect for all industries which policymakers and planners might directly control. This finding warns us about generic policy designs uncritically based on outcomes from other experiences. Although these results show a complex problem in terms of regional policy, some recommendations for industrial spatial distribution may, however, be derived from this study. For instance, during this period and on average, industries work in favor of geographical dispersion of manufacturing. This geographical dispersion provides a unique opportunity to combine endogenous growth variables such as Jacobs economies with current macroeconomic spatial effects to design a policy of regional industrialization in Mexico. Additionally, the allocation of resources from oil exports under economic and non-economic criteria facilitates this process with no critical decisions in terms of the equity/efficiency dilemma. Results obtained may be influenced by the level of aggregation of the data and the events in the period of study such the economic crisis and recovering and the free trade liberalization policy.