Mexican Manufacturing Sector Research Articles

Barriers Hindering the Successful Deployment of GLSS in Organizations: Findings from an Empirical Study

Given the growing interest in manufacturing’s environmental effects, understanding the impact of improvement strategies on sustainability is critical. This study focuses on the implementation of Green Lean Six Sigma (GLSS) in the Mexican manufacturing sector, an area where research is limited, particularly concerning the barriers to successful outcomes. Through the development of a structural equation model using SPSS software,,version 25, 64-bit edition, key barriers such as lack of investment, insufficient participation, ineffective infrastructure, and lack of training were identified as the primary challenges to GLSS implementation. This study also highlights the interrelationships between these barriers and their influence on project success, emphasizing the role of insufficient participation as a critical mediating factor. This insight allows for a deeper understanding of how these obstacles affect the benefits of GLSS initiatives. The findings offer valuable guidance for researchers and practitioners, providing tools to enhance the effectiveness of GLSS implementation in the manufacturing industry. The study’s marginal contribution lies in its identification of key barriers and the introduction of insufficient participation as a mediating factor, offering a more comprehensive understanding of their impact on project success and contributing to improved GLSS adoption strategies.

Trade and factor intensity, and the transmission of the global shock to labor: A panel analysis of the fall of the labor income share in the Mexican manufacturing sector

The paper studies the fall of the labor income share in Mexico, contrasting the role of trade and factor intensity as transmission channels of the China shock of 2001. It finds that, while the skill, technological and —more surprisingly— trade intensity of Mexican industries were largely irrelevant, capital intensity played a key role: in particular, the higher was the industries’ initial capital intensity, the more vulnerable they were to the transmission of the global shock to labor. The finding is consistent with the proposition that industrial integration, concentrated in industries that are capital-intensive from the perspective of developing countries, facilitated the transmission of the shock. Results come from the estimation of panel equations for the annual change in the labor share across Mexican manufacturing industries, where transmission is measured by the correlation between changes in the United States and Mexican industry labor shares.

Market competition and firm productivity and innovation: Responses in Mexican manufacturing industries

AbstractThis paper investigates the causal relationship between competition and firm innovation and the impact of competition on firm productivity in the Mexican manufacturing sector. We use the analytical framework proposed by Aghion et al. (2005) and evaluate their central hypothesis. We use firm‐level data from the Mexican manufacturing survey over the period 2009–2017. Our results show a negative linear relationship between competition and the intensity of firm innovation investment. These results are primarily due to the substantial technological disparity that exists across firms within sectors, where most firms compete very far from the leaders.

Does it pay to cooperate? The case of cooperatives in the Mexican manufacturing sector

AbstractVarious economic theories suggest cooperatives are an inefficient organizational form, but empirical evidence remains elusive. In Europe, the data does not necessarily support this view. There, a cooperative‐friendly environment and policy infrastructure may explain this outcome. So what happens to cooperatives’ performance in a country where this type of organization is little known and public policies do not support them? To answer this question I used the Economic Censuses of Mexico to compare cooperatives and private firms in the country's manufacturing sector. Using a propensity score matching and the Oaxaca‐Blinder decomposition, several findings emerge. First, joint‐stock and individually owned firms do have a higher sales performance relative to cooperatives in Mexico. Second, as productive units mature and gain more experience, however, that sales gap declines. Within the different endowments that may explain these results, the population size of districts where productive units are located is a variable that appears on a recurring basis. Relative to private firms, cooperatives are located in smaller municipalities. Even though this may affect their sales, such location is the result of a strategy to safeguard the cooperative spirit.

Intellectual capital, organisational performance and competitive advantage

At present, the role of intellectual capital in organisations is significantly more important than in the past owing to the transition from an economy based on assets to another based on knowledge. The value of intangible assets increases as that of tangible assets decreases; this allows organisations, which prioritise intellectual capital, to produce competitive advantages and achieve better performance. The purpose of this paper is to ascertain if human capital, structural capital and relational capital have a positive influence on the organisational performance of medium-sized firms in the Mexican manufacturing sector. Moreover, it is analysed if competitive advantage mediates the relation between intellectual and organisational performance. Data were obtained from a survey sent to 309 CEOs of Mexican manufacturing firms. In order to test the research hypotheses, the construct validity was tried by means of face, content, convergent, nomological and discriminant validity, for which techniques such as exploratory and confirmatory factor analysis using SPSS and AMOS, respectively, were resorted to. Later on, Partial Least Squares Structural Equation Modelling (PLS-SEM) was applied using software SmartPLS. Results showed that the three dimensions of intellectual capital have a positive and significant influence on organisational performance. Furthermore, competitive advantage mediates the relation between intellectual capital and organisational performance.

Measuring Back Injury Risk in Mexican Workers of an Automotive Company

Introduction: The Mexican manufacturing sector in the automotive industry employs an average of 8 million 850 thousand workers per year spread across the 32 states, of which Puebla contributes with 465 106, developing, in a high percentage, the verification of new parts as part of the manufacture process. This activity is supported by the use of devices known as fixtures, whose equipment and tool forces operators to lift loads between 10 and 50 kilograms by performing manual operations to hold parts, presenting pain at the lumbar level, therefore, it is essential to measure the risks of back injuries in the study population. The objective was to identify and measure the risks of back injuries in the study population. Materials and methods: The inspection process is analyzed by identifying the potential risk factors. Ergonomic methodologies and instruments are used, such as Quick Exposure Check (QEC), the National Institute for Occupational Safety and Health (Niosh) equation, the reba (Rapid Entire Body Assessment) method, Ovako’s Work Posture Analysis System (OWAS), among others. Results: The qec method shows that trunk/back and wrist/hand are the most sensitive parts to risk exposure, indicating that 18 % of the postures are rated 4 in the level of risk, with the back rotated and bent in over 32 % of time. The weight of the operation exceeds 20 kilograms in 71.4 %. Conclusion: Four ergonomic techniques are used to assess the risk of injury, the inspection process of manufactured parts is analyzed.

The impact of competition with China in the US market on innovation in Mexican manufacturing firms

Using data from 6378 Mexican firms for the 2012–2013 period, this paper estimates the effect of competition with China for the US market on the innovation efforts of the Mexican manufacturing sector. After controlling for the influence of several variables, we find a U-curve shaped relationship between foreign competition (measured by the China effect) and the innovation of Mexican manufacturing firms in products, in processes, and for the world. Given that the quadratic positive effect is much larger than the negative linear effect, we conclude that an Escape-Competition effect dominates when Mexican firms are fighting for a larger market share with China in the US.

Technical and structural change, and the fall in the manufacturing output–capital ratio in Mexico, 1990–2015

The article studies the fall in the manufacturing output–capital (OC) ratio in Mexico in the post-trade liberalisation period 1990–2015. From a classical perspective, a pattern of falling OC ratio, rising labour productivity and greater capital intensity can be interpreted as a case of Marx-biased technical change. A within–between-industry decomposition shows, however, that in Mexico the fall in the average OC ratio reflects not only within-industry technical change but also structural change, in the form of a change in the composition of the capital stock towards industries with low or declining OC ratios. Econometric estimations, moreover, show that within-industry technical change was not related to the initial level or change in domestic labour costs, as in the dominant interpretation of the sources of Marx-biased technical change, but was driven instead by Mexico’s industrial integration with the USA. Within-industry technical change—and convergence to US OC ratios—dominated in an early phase, but were replaced by structural change and divergence in a later phase, following the China shock of the early 2000s. Irrespective of the source of change in the average OC ratio, though, both within-industry technical change in the early phase and structural change in the late one tended to reduce the average profit rate in the Mexican manufacturing sector.

The Role of Green and Traditional Supplier Attributes on Business Performance

Supplier evaluation and selection are fundamental tasks since they are part of the production process and even initiate the supply chain (SC). Despite their importance in the production system, supplier evaluation and selection may be challenging activities to be performed if companies look at the wide range of available evaluation techniques and methodologies, which now seek to integrate both traditional and green attributes. In addition, companies may refuse to take into account green attributes during the supplier selection process, because they do not know their impact on commercial benefits. To overcome this limitation, this study examines the Mexican manufacturing sector and measures the impact of supplier traditional attributes and green attributes on business performance, namely production process benefits and commercial benefits. As data collection instrument, we administered a survey to 253 supplier evaluators and selectors; then, using the gathered data, we constructed a structural equation model. The model includes four variables to determine the impact of traditional and green attributes on business performance: green attributes, traditional attributes, production process benefits, and commercial benefits. The results indicate that all the latent variables have positive direct effects on one another. For instance, process benefits show the largest effects on commercial benefits, but the most significant effect is caused by traditional attributes on commercial benefits through green attributes and production process benefits.

US manufacturing imports from China and employment in the Mexican manufacturing sector

Since 2001 the Mexican manufacturing sector has experienced a reduced rate of growth. This study estimates the impact of US and Chinese industrial activity on the demand for labor in the sector. A time series cointegration model is developed using data on industrial activity, Chinese exports, wages and the peso: dollar exchange rate. The results show that exports from China to the USA and manufacturing wages have both affected labor demand negatively, while factors such as US industrial production and the exchange rate encourage manufacturing activity.

Little value creation, articulation and propagating forces: A hypothesis for the Mexican manufacturing sector

This paper evaluates the impact of Mexican trade and productive integration processes during the last 20 years. It finds evidence that growing per capita income in Mexico is directly related to its “trade opening”, but is inversely related to the growth of its manufacturing export industry. Specifically, for each point of growth in “trade opening” (as a proportion of GDP) per capita income grew by 0.22%; while each point of increase in the share of industrial exports reduced income per person by 0.09%.To explain this apparent contradiction between the positive effect of “trade opening” and the negative impact of productive manufacturing specialization, we examined the characteristics of Mexico's industry. Results show that although Mexico's export-led industrialization successfully adapted to the world market and transformed its productive, business, organizational and technological structure, it did not translate into adequate macroeconomic benefits due to the absence of strong value dissemination forces over the rest of the economy.In this sense, poor internal linkages in the maquila industry, its high propensity to import, and its limited value added generation, among other elements, led the Mexican industry to operate as an export enclave. In those circumstances, manufacturing does not generates positive externalities nor articulations, nor strong disseminations that increase and multiplies value in other sectors of industry, thus limiting expansion effects and restraining or even reducing–under some specific circumstances–per capita income growth.

Mexico's manufacturing competitiveness in the US market: A short-term analysis

This paper investigates the impact of some key variables on Mexican manufacturing competitiveness in the US market. To that end, we construct an international competitiveness (IC) index for the manufacturing sector. The responsiveness of such an index to an ample set of variables is evaluated through the use of a stationary VAR model. The short-term empirical evidence indicates that: 1) real currency depreciation weakens, rather than strengthens, IC; 2) labor productivity has a strong positive effect on IC, and 3) a real interest rate increase reduces IC. These findings reflect three fundamental problems of the Mexican manufacturing sector and thus have important economic policy implications.

Little Value Creation, Articulation and Propagating Forces: A Hypothesis for the Mexican Manufacturing Sector

This paper evaluates the impact of Mexican trade and productive integration processes during the last 20 years. It finds evidence that growing per capita income in Mexico is directly related to its “trade opening”, but is inversely related to the growth of its manufacturing export industry. Specifically, for each point of growth in “trade opening” (as a proportion of GDP) per capita income grew by 0.22%; while each point of increase in the share of industrial exports reduced income per person by 0.09%.To explain this apparent contradiction between the positive effect of “trade opening” and the negative impact of productive manufacturing specialization, we examined the characteristics of Mexico’s industry.Results show that although Mexico’s export-led industrialization successfully adapted to the world market and transformed its productive, business, organizational and technological structure, it did not translate into adequate macroeconomic benefits due to the absence of strong value dissemination forces over the rest of the economy.In this sense, poor internal linkages in the maquila industry, its high propensity to import, and its limited value added generation, among other elements, led the Mexican industry to operate as an export enclave. In those circumstances, manufacturing does not generates positive externalities nor articulations, nor strong disseminations that increase and multiplies value in other sectors of industry, thus limiting expansion effects and restraining or even reducing – under some specific circumstances – per capita income growth.

Competitiveness in the Latin American Manufacturing Sector: Trends and Determinants

After analysing the evolution of exports from the large Latin American countries over the last decade, and examining on a case by case basis the determinants for each country's performance, this study concludes that competitiveness in the manufacturing sectors of most countries in the region went down from 2007 to 2012, after relatively favourable progress in the previous five-year period between 2002 and 2007. This recent deterioration, which has been more noticeable in countries such as Brazil and Colombia, is related to the real exchange rate appreciation, high labour costs and insufficient progress in labour productivity. The main exception to these regional trends is Mexico, where gains in the manufacturing sector's competitiveness continued beyond 2007, partly because the exchange rate stayed relatively depreciated and labour costs, as well as work productivity, performed better than in the South American countries. However, from 2011 onwards, the reversal of these trends has been making it difficult for the Mexican manufacturing sector to gain competitiveness. Case studies of each of the region's main countries show that in general the exchange rate, labour costs and work productivity were the main determinants in the evolution of manufacturing competitiveness in the last decade. In fact, the countries and periods where these variables performed poorly coincide with losses of market share in international trade and deteriorating competitiveness. Nevertheless, the impact of the remaining variables affecting the manufacturing sector's competitiveness is not insignificant either. In fact, gains in competitiveness have been greater (and losses in competitiveness smaller) in Chile and Peru, where the institutional framework has improved and logistics and energy costs reduced or kept under control.

Evaluating Different Types of Enterprise Support Programs Using Panel Firm Data: Evidence from the Mexican Manufacturing Sector

(ProQuest: ... denotes formulae omitted.)In most countries, small and medium-sized enterprises (SMEs) make up the vast majority of firms, account for a substantial share of gross domestic product, and involve the bulk of the workforce. However, SMEs often lag behind larger firms in many performance dimensions. This lag is widely believed to result from constraints that SMEs face, including decreased access to finance, weak managerial and workforce skills, an inability to exploit scale economies in production, and imperfect information about market opportunities, new technologies, and methods of organization.In Mexico, microenterprises and SMEs make up 99 percent of firms, employ about 64 percent of the workforce, and account for more than 40 percent of GDP. Given the importance of SMEs in the economy, governments in Mexico over the past twenty years have established a wide variety of SME support programs. How effective these SME programs have been in achieving their objectives is unclear. In Mexico, impact evaluations of SME programs are rare. Most evaluations are qualitative in nature and narrow in scope, usually measuring beneficiary satisfaction with either support services or program coverage.This paper evaluates SME support programs in Mexico using a panel of firm-level data for two groups of firms-a treatment group that participated in SME programs and a control group that did not. The panel data have been created by linking SME program participation information to a large panel of annual industrial surveys (1994-2005) maintained by Mexico's National Institute of Statistics and Geography.The panel data provide an opportunity to address several issues that have plagued impact evaluations of SME programs in most countries, including Mexico. First, asking program participation questions in the firm survey allows the identification of firms that have never participated in any program and firms that have participated in different types of SME support programs such as business development services (BDS) or programs to support research and development (R&D).1 Second, the availability of multiple years of information on the characteristics and performance of participant firms-both before and after program participation-allows us to estimate the impacts of support programs that address selection biases arising from differences between the treatment and control groups in observable attributes and in unobserved heterogeneity. Our findings suggest that program participation in certain types of BDS and R&D support programs is associated with a higher value added per worker and increases in employment and exports. The positive impact associated with firm participation is strongest and most robust in the R&D support programs, which include the Sector Promotions Program (PROSEC) of the Ministry of Economy and the Fiscal Incentives and Technological Innovation (FITI) program of the National Science and Technology Council. These programs showed positive and statistically significant impacts on firm performance, ranging from increases of 9-13 percent on sales-and, in the case of PROSEC, increases of 12 percent in value added per worker and 10 percent in production per worker. Both R&D programs increased exports between 16 and 18 percent. The results also indicate that some outcomes, such as employment and value added per worker, showed positive effects only after the third or fourth year of program participation, although the effect increases as time goes on. As for BDS programs, we estimate positive effects on sales, fixed assets, and productivity measures from the National Environmental Audit Program (PNAA). We were unable to identify positive effects of this program on other outcomes or positive effects of the Comprehensive Quality and Modernization Program for Training the Industrial Workforce (CIMO-PAC).An Overview of SME Programs in MexicoThe Mexican federal government supports the development and competitiveness of Mexican firms by improving the overall business environment and through interventions to support individual firms or groups of firms, especially SMEs. …

Evaluating Different Types of Enterprise Support Programs Using Panel Firm Data: Evidence from the Mexican Manufacturing Sector

Evaluating Different Types of Enterprise Support Programs Using Panel Firm Data: Evidence from the Mexican Manufacturing Sector Gladys López-Acevedo (bio) and Mónica Tinajero-Bravo (bio) In most countries, small and medium-sized enterprises (SMEs) make up the vast majority of firms, account for a substantial share of gross domestic product, and involve the bulk of the workforce. However, SMEs often lag behind larger firms in many performance dimensions. This lag is widely believed to result from constraints that SMEs face, including decreased access to finance, weak managerial and workforce skills, an inability to exploit scale economies in production, and imperfect information about market opportunities, new technologies, and methods of organization. In Mexico, microenterprises and SMEs make up 99 percent of firms, employ about 64 percent of the workforce, and account for more than 40 percent of GDP. Given the importance of SMEs in the economy, governments in Mexico over the past twenty years have established a wide variety of SME support programs. How effective these SME programs have been in achieving their objectives is unclear. In Mexico, impact evaluations of SME programs are rare. Most evaluations are qualitative in nature and narrow in scope, usually [End Page 1] measuring beneficiary satisfaction with either support services or program coverage. This paper evaluates SME support programs in Mexico using a panel of firm-level data for two groups of firms—a treatment group that participated in SME programs and a control group that did not. The panel data have been created by linking SME program participation information to a large panel of annual industrial surveys (1994–2005) maintained by Mexico’s National Institute of Statistics and Geography. The panel data provide an opportunity to address several issues that have plagued impact evaluations of SME programs in most countries, including Mexico. First, asking program participation questions in the firm survey allows the identification of firms that have never participated in any program and firms that have participated in different types of SME support programs such as business development services (BDS) or programs to support research and development (R&D).1 Second, the availability of multiple years of information on the characteristics and performance of participant firms—both before and after program participation—allows us to estimate the impacts of support programs that address selection biases arising from differences between the treatment and control groups in observable attributes and in unobserved heterogeneity. Our findings suggest that program participation in certain types of BDS and R&D support programs is associated with a higher value added per worker and increases in employment and exports. The positive impact associated with firm participation is strongest and most robust in the R&D support programs, which include the Sector Promotions Program (PROSEC) of the Ministry of Economy and the Fiscal Incentives and Technological Innovation (FITI) program of the National Science and Technology Council. These programs showed positive and statistically significant impacts on firm performance, ranging from increases of 9–13 percent on sales—and, in the case of PROSEC, increases of 12 percent in value added per worker and 10 percent in production per worker. Both R&D programs increased exports between 16 and 18 percent. The results also indicate that some outcomes, such as employment and value added per worker, showed positive effects only after the third or fourth year of program participation, although the effect increases as time goes on. As for BDS programs, we estimate positive effects [End Page 2] on sales, fixed assets, and productivity measures from the National Environmental Audit Program (PNAA). We were unable to identify positive effects of this program on other outcomes or positive effects of the Comprehensive Quality and Modernization Program for Training the Industrial Workforce (CIMO-PAC). An Overview of SME Programs in Mexico The Mexican federal government supports the development and competitiveness of Mexican firms by improving the overall business environment and through interventions to support individual firms or groups of firms, especially SMEs. Between 2001 and 2006, the Mexican government invested the equivalent of US$13 billion in approximately 3.7 million SMEs (World Bank 2010). Several agencies in Mexico provide SME support. The Ministry of Economy is first with regard to coverage...

Multifactor productivity and its determinants: an empirical analysis for Mexican manufacturing

The aim of this paper is twofold. First, we estimate production functions for the Mexican manufacturing sector and for 14 comprehensive groups, allowing us to construct various measures of multifactor productivity. Second, we analyse some of the determinants of productivity growth. We find that, on the one hand, there is a positive relationship between market concentration and technology adoption; on the other hand, both technology adoption and human capital promote productivity, whilst market concentration exerts a negative influence on it. Our results suggest that, once controlling for the effect on technology adoption, more concentration impacts negatively productivity growth.

Perceptions of environmental management systems

PurposeOver the last several years, there has been a significant increase worldwide in the implementation of environmental management systems (EMS). Yet, few studies have provided feedback on managerial views of key components and performance of these systems. The purpose of this paper is to examine variations in perceptions of a number of environmental and human resource constructs that are operationalized and measured in the field at Mexican maquiladoras. Differences between organizations with a certified EMS, informal EMS, and no EMS are examined.Design/methodology/approachA survey was administered to 220 manufacturing organizations in Mexico. The survey instrument was self‐report format with attitudinal variables. Items were adopted from previously published scales. A global hypothesis was proposed in order to test the difference between groups across multiple dependent variables. A MANCOVA and post hoc MANOVA were used to simultaneously evaluate the difference among the multiple metric dependent variables in this study.FindingsThe paper found that significant facility differences existed for all environmental management practices and perceived environmental performance across all levels of EMS, with certified EMS facilities being the highest, informal EMS facilities being second and facilities with no EMS being lowest.Originality/valueThis study contributes to both theory and practice. First, it extends the literature related to EMS and environmental and human resource constructs. Second, it tests the role of EMS certification in firm environmental management. Third, the study is the first to compare EMS differences among firms in the Mexican manufacturing sector. Finally, the study has relevant implications for practitioners.

Public‐private partnership to develop infrastructure and encourage innovation in Mexico

PurposeThe paper focuses in the innovation strategies and wealth creation in Mexico.Design/methodology/approachThe paper explores the innovation competitiveness process in both the manufacturing and information technology sectors through four research questions.FindingsGiven that the manufacturing sector has been the driver in terms of invention and innovation, it seems logical that Mexico faces a similar parallel. Also, the Mexican information technology sector needs to explore new business opportunities in order to stay profitable in the long term.Research limitations/implicationsThe paper is in an early stage and needs to focus on one policy issue. Moreover, it is not a proper diagnosis of the current situation of the Mexican manufacturing sector. Suggestions for future research include expanding the literature review and including recent reports issued by international organisations (e.g. OECD' Science, Technology & Industry Outlook, UNCTAD's World Investment Report 2008: Transnational Corporations and the Infrastructure Challenge, and the World Economic Forum's Global Competitiveness Report). This inputs would help to strengthen the analysis with an international comparative perspective (e.g. what are the relevant gaps between Mexico and competitor Asian economies?). In turn this would provide a more rigorous grounding for recommendations.Practical implicationsThe Mexican economy needs to develop based on infrastructural investment from the Mexican government and the growing private sector (maquiladoras and indigenous Mexican enterprises). Also, Mexico needs to invest heavily in educational enterprise in order to foster an atmosphere of research and discovery to support efforts by the government and private sectors.Originality/valueAdequate investment by the Mexican government and private sector could potentially bring back the manufacturing establishments currently located in Asia to Mexico, given the proximity advantages coupled with the NAFTA agreement.

Intra- and Inter-industry Externalities from Foreign Direct Investment in the Mexican Manufacturing Sector: New Evidence from Mexican Regions

Summary This paper presents new empirical evidence on externalities from Foreign Direct Investment (FDI) in several Mexican regions in the early 1990s. The main findings are threefold. First, the presence of FDI creates negative externalities within industries and positive externalities between industries through backward linkages. Second, FDI-externalities are stimulated by large technological differences between FDI and Mexican firms and by geographic concentration of industries. Third, we identify a substantial level of regional heterogeneity of the externality impact of FDI, in line with the notion that FDI may have contributed to processes of changing regional prosperity under trade liberalization. The findings also imply that maquiladora firms in the border states are generating positive externalities.