Abstract
A dynamic panel data (DPD) model is estimated to assess the contribution of the average schooling years, the education expenditure and the inventive coefficient—as an approximation for innovation—to the increased productivity of the Mexican states. The potential difficulties of endogeneity and serial correlation are controlled by adopting system General Method of Moments (GMM) procedures. The findings are compatible with the theory. The importance of the lags is confirmed and the positive and significant impacts on productivity tend to vary according to the income level and the geographical location of the regions. Innovation is an important contributor to northern, central and richer states’ productivity, but education expenditure is important for the poorer states and scholarly attainment stands out in the southern states. The analysis emerging from the model concludes that these regional differences should be seen as a potential opportunity for designing customized policies capable of increasing the productivity and not as a weakness.
Highlights
Throughout the period 1994-2012, the Mexican economy accumulated 3.72 patents per 100,000 inhabitants, as an annual average; the educational attainment reached 7.76 years of scholarly attainments and the education expenditure per student at the university averaged 14.67 Mexican pesos at constant prices
Alluding to theoretical reasons of economic phenomena—such as the productivity—that tend to be reinforced over time, in this work dynamic panel data techniques are applied to investigate the impacts from innovation, education expenditure and average schooling years, in a regional context
The estimated relationship among variables is compatible with the theory: the contribution on productivity varies according to the sample and the importance of the lags is confirmed
Summary
Throughout the period 1994-2012, the Mexican economy accumulated 3.72 patents per 100,000 inhabitants, as an annual average; the educational attainment reached 7.76 years of scholarly attainments and the education expenditure per student at the university averaged 14.67 Mexican pesos at constant prices. The referred process deriving from innovation is accumulative and relies heavily on the ability of the country or region to develop such efforts for special factors like the quality of education, the availability of knowledge infrastructure—universities and research centers—and the efficient functioning of the markets (Vieira et al [10]). Brown and Guzmán [16] analyze the determinants of innovation of Mexican manufacturing establishments and highlight that innovation has been influenced by characteristics of the open economy such as exportation activities, foreign investments and it is related to the size of the firm.Because of productivity is considered to be one of the key elements in explaining regional growth and its differences, it will be interesting to explore some of the main factors that determine it
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