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Does Mexico Possess A Well-Developed Business Infrastructure And Environment Enabling Its Manufacturing Firms To Assume A Leading Role Over Countries In Central America?

Year 2024, Volume: 9 Issue: 2, 348 - 359

Abstract

This study investigates the potential for Mexican manufacturing firms to play a pivotal role in advancing the manufacturing sector over areas of Central America. The research evaluates Mexico's infrastructure and business environment, drawing comparisons with its key players, Panama and El Salvador. The study explores whether Mexican manufacturing firms possess a competitive advantage. Employing a two-stage process utilizing the Chi-Square and Marascuilo procedure of multiple comparisons, the research utilizes data from the World Bank Enterprise Survey databank. The findings suggest Panama's infrastructure and business environment significantly surpass Mexico and El Salvador. The study reveals that El Salvador outperforms Mexico and Panama in three of four dimensions of business synergy. Findings indicate Mexico cannot assume a leading role for these reasons.

References

  • Agboli, M., & Ukaegbu, C. C. (2006). Business environment and entrepreneurial activity in Nigeria: Implications for industrial development, The Journal of Modern African Studies, 44(1), 1-30.
  • Agénor, P. R., & Moreno-Dodson, B. (2006). Public infrastructure and growth: New channels and policy implications (Vol. 4064). World Bank Publications.
  • Alarussi, A. S. A. (2021). Financial ratios and efficiency in Malaysian listed companies. Asian Journal of Economics and Banking, 5(2), 116-135.
  • Alvarez, J., & Valencia, F. (2016). Made in Mexico: Energy reform and manufacturing growth. Energy Economics, 55, 253-265.
  • Atkinson, R. D. (2013). Competitiveness, innovation and productivity: Clearing up the confusion. The Information Technology & Innovation Foundation, 1(1), 1-7.
  • Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2008). How important are financing constraints? The role of finance in the business environment. The world bank economic review, 22(3), 483-516.
  • Bah, E. M., & Fang, L. (2011, July 12). Impact of the Business Environment on Output and Productivity in Africa. Papers.ssrn.com. https://ssrn.com/abstract=1884563
  • Bah, E. H., & Fang, L. (2015). Impact of the business environment on output and productivity in Africa. Journal of Development Economics, 114, 159-171.
  • Block, M. Á. G., Morales, H. R., Hurtado, L. C., Balandrán, A., Méndez, E., & World Health Organization. (2020). Mexico: health system review.
  • Cantwell, J. (2003). Innovation and competitiveness. Revised Version of Chapter 21, Handbook of Innovation, Oxford University Press.
  • CBInsights (2019). Fintech In Mexico: 80+ Startups Bringing Financial Innovation To the Region. Retrieved from https://www.cbinsights.com/research/mexico-fintech-market-map-expert-intelligence/. Accessed May 4, 2023.
  • Cloutier, O., Felusiak, L., Hill, C., & Pemberton-Jones, E. J. (2015). The importance of developing strategies for employee retention. Journal of Leadership, Accountability & Ethics, 12(2).
  • Congressional Research Service (2017). U.S.-Mexican Security Cooperation: The Mérida Initiative and Beyond. Retrieved from https://crsreports.congress.gov/product/pdf/R/R41349. Accessed May 4, 2023.
  • de la Cruz, E. L. (2016). Workforce Training: It’s the Law in Mexico. Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/global-hr/pages/workforce-training-is-the-law-in-mexico.aspx. Accessed May 4, 2023.
  • Doğan, E. (2016). The effect of innovation on competitiveness. Istanbul University Econometrics and Statistics e-Journal, (24), 60-81.
  • Dumas, A., & Hanchane, S. (2010). How does job‐training increase firm performance? The case of Morocco. International Journal of Manpower, 31(5), 585-602.
  • Escaith, H. (2001). The Small Economies of Latin America and the Caribbean. CEPAL Review, 74, 67-81.
  • Escribano, A., Guasch, J. L., & Pena, J. (2010). Assessing the impact of infrastructure quality on firm productivity in Africa: cross-country comparisons based on investment climate surveys from 1999 to 2005. World Bank Policy Research Working Paper, (5191)
  • Falciola, J., Jansen, M., & Rollo, V. (2020). Defining firm competitiveness: A multidimensional framework. World Development, 129, 104857.
  • Fay, M., Han, S., Lee, H. I., Mastruzzi, M., & Cho, M. (2019). Hitting the Trillion Mark--A Look at How Much Countries Are Spending on Infrastructure. World Bank Policy Research Working Paper, (8730).
  • Fogel, G. (2001). An analysis of entrepreneurial environment and enterprise development in Hungary. Journal of Small Business Management, 39(1), 103-109.
  • Fonseka, M. M., Tian, G. L., & Li, L. C. (2014). Impact of financial capability on firms’ competitiveness and sustainability: Evidence from highly regulated Chinese market. Chinese Management Studies, 8(4), 593-623.
  • Forbes (2015). Mexico’s Manufacturing Sector Continues to Grow. Retrieved from https://www.forbes.com/sites/stratfor/2015/04/08/mexicos-manufacturing-sector-continues-to-grow/?sh=21b3c9a95764. Accessed May 4, 2023.
  • Gaviria, A. (2002). Assessing the effects of corruption and crime on firm performance: Evidence
  • from Latin America. Emerging Markets Review, 3(3), 245-268.
  • Hair J, Babin B, Anderson R, Black W (2018). Multivariate Data Analysis, Chapter 01: Overview of Multivariate Analysis. 8th edition, Publisher: Cengage (2018).
  • Heintz, J., Pollin, R., & Garrett-Peltier, H. (2009). How infrastructure investments support the
  • US economy: employment, productivity and growth. Political Economy Research
  • Institute (PERI), University of Massachusetts Amberst.
  • Kliestik, T., Valaskova, K., Lazaroiu, G., Kovacova, M., & Vrbka, J. (2020). Remaining financially healthy and competitive: The role of financial predictors. Journal of Competitiveness, (1).
  • Kleynhans, E. P. (2016). Factors determining industrial competitiveness and the role of spillovers. Journal of Applied Business Research (JABR), 32(2), 527-540.
  • Kotane, I., & Kuzmina-Merlino, I. (2012). ASSESSMENT OF FINANCIAL INDICATORS FOR EVALUATION OF BUSINESS PERFORMANCE. European integration studies, (6).
  • Msomi, T., & Olarewaju, O. (2021). Evaluation of access to finance, market and viability of small and medium-sized enterprises in South Africa. Problems and Perspectives in Management, 19(1), 281.
  • Powell, B., Manish, G. P., & Nair, M. (2010). Corruption, crime and economic growth. In Handbook on the Economics of Crime. Edward Elgar Publishing.
  • Reuters (2016). El Salvador declares drought emergency for first time ever. Retrieved from https://www.reuters.com/article/us-el-salvador-drought/el-salvador-declares-drought-emergency-for-first-time-ever-idUSKCN0XB2YM. Accessed May 4, 2023.
  • Salas, E. B. (2023). Water consumption volume in Panama 2011-2020. Retrieved from https://www.statista.com/statistics/720976/water-consumption-panama/. Accessed May 4, 2023.
  • Shaiken, H. (1994). Advanced manufacturing and Mexico: A new international division of labor? Latin American Research Review, 29(2), 39-71.
  • Simionescu, M., Pelinescu, E., Khouri, S., & Bilan, S. (2021). The Main Drivers of Competitiveness in the EU-28 Countries. Journal of Competitiveness, (1).
  • Su, D. & Yao, Y. (2017) Manufacturing as the key engine of economic growth for middle-income economies, Journal of the Asia Pacific Economy, 22:1, 47-70.
  • Teplicka, K. (2018). Taxes, License, and its Influence on Business Environment in Slovakia.
  • World Bank1 (2023). Access to electricity (% of population) – El Salvador. (Last updated 04 April 2023). Retrieved from https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=SV. Accessed May 4, 2023.
  • Wang, C., Lim, M. K., Zhang, X., Zhao, L., & Lee, P. T. W. (2020). Railway and road infrastructure in the Belt and Road Initiative countries: Estimating the impact of transport infrastructure on economic growth. Transportation Research Part A: Policy and Practice, 134, 288-307.
  • World Bank2 (2023). Access to electricity (% of population) – Mexico. (Last updated 04 April 2023). Retrieved from https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=MX&most_recent_year_desc=true. Accessed May 4, 2023.
  • World Bank3 (2023). Access to electricity (% of population) – Panama. (Last updated 04 April 2023). Retrieved from https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=PA. Accessed May 4, 2023.
  • World Bank4 (2023). Enterprise Surveys. What Businesses Experience, Retrieved from https://www.enterprisesurveys.org/en/data. Accessed December 4, 2023.
  • World Bank5 (2016). Strengthening Shared Prosperity in Panama: Fostering inclusive growth and better opportunities for the marginalized and vulnerable. Retrieved from https://www.worldbank.org/en/results/2016/09/22/strengthening-shared-prosperity-in-panama. Accessed May 4, 2023.
  • World Bank6 (2023). The World Bank in El Salvador. (Last updated 04 April 2023). Retrieved from https://www.worldbank.org/en/country/elsalvador/overview. Accessed May 4, 2023.
  • World Bank7 (2023). The World Bank in El Salvador. (Last updated 04 April 2023). Retrieved from https://www.worldbank.org/en/country/elsalvador/overview#2. Accessed May 4, 2023.
  • World Bank8 (2023). The World Bank in Mexico. (Last updated 04 April 2023). Retrieved from https://www.worldbank.org/en/country/mexico/overview. Accessed May 4, 2023.
  • World Bank9 (2023). The World Bank in Mexico. (Last updated 04 April 2023). Retrieved from https://www.worldbank.org/en/country/mexico/overview#3. Accessed May 4, 2023.
  • World Bank10 (2023). The World Bank in Panama. (Last updated 04 April 2023). Retrieved from https://www.worldbank.org/en/country/panama/overview. Accessed May 4, 2023.
  • World Bank11 (2024). Enterprise Surveys. What Businesses Experience, Retrieved from
  • https://www.enterprisesurveys.org/en/methodology. Accessed April 2, 2024.
  • United Nations Office on Drugs and Crime (2016). Panama becomes the first country to join CRIMJUST. Retrieved from https://www.unodc.org/unodc/en/drug-trafficking/crimjust/news/panama-becomes-first-country-to-join-crimjust.html. Accessed May 4, 2023.
  • U.S. Department of State (2017). 2016 Country Reports on Human Rights Practices: El Salvador. Retrieved from https://www.state.gov/reports/2016-country-reports-on-human-rights-practices/el-salvador/. Accessed May 4, 2023.
  • U.S. Department of State (2017). 2016 Country Reports on Human Rights Practices: Mexico. Retrieved from https://www.state.gov/reports/2016-country-reports-on-human-rights-practices/mexico/. Accessed May 4, 2023.

Meksika, Üretim Firmalarının Orta Amerika Ülkeleri Üzerinde Lider Bir Rol Üstlenmesini Sağlayacak Gelişmiş Bir İş Altyapısına ve Çevreye Sahip mi?

Year 2024, Volume: 9 Issue: 2, 348 - 359

Abstract

Bu çalışma, Meksikalı üretim firmalarının Orta Amerika'daki üretim sektörünü geliştirmede kilit bir rol oynama potansiyelini araştırmaktadır. Araştırmada, Meksika'nın altyapısı ve iş ortamı değerlendirilerek Panama ve El Salvador gibi kilit aktörlerle karşılaştırmalar yapılmıştır. Çalışma, Meksikalı üretim firmalarının rekabet avantajına sahip olup olmadığını incelemektedir. İki aşamalı bir süreç kullanılarak Chi-Kare ve Marascuilo çoklu karşılaştırma prosedürü uygulanmış ve Dünya Bankası İşletme Anketi veri tabanı kullanılmıştır. Bulgular, Panama'nın altyapı ve iş ortamının Meksika ve El Salvador'dan önemli ölçüde üstün olduğunu göstermektedir. Çalışma ayrıca, El Salvador'un iş sinerjisinin dört boyutundan üçünde Meksika ve Panama'yı geride bıraktığını ortaya koymaktadır. Bulgular, Meksika'nın bu nedenlerle lider bir rol üstlenemeyeceğini göstermektedir.

References

  • Agboli, M., & Ukaegbu, C. C. (2006). Business environment and entrepreneurial activity in Nigeria: Implications for industrial development, The Journal of Modern African Studies, 44(1), 1-30.
  • Agénor, P. R., & Moreno-Dodson, B. (2006). Public infrastructure and growth: New channels and policy implications (Vol. 4064). World Bank Publications.
  • Alarussi, A. S. A. (2021). Financial ratios and efficiency in Malaysian listed companies. Asian Journal of Economics and Banking, 5(2), 116-135.
  • Alvarez, J., & Valencia, F. (2016). Made in Mexico: Energy reform and manufacturing growth. Energy Economics, 55, 253-265.
  • Atkinson, R. D. (2013). Competitiveness, innovation and productivity: Clearing up the confusion. The Information Technology & Innovation Foundation, 1(1), 1-7.
  • Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2008). How important are financing constraints? The role of finance in the business environment. The world bank economic review, 22(3), 483-516.
  • Bah, E. M., & Fang, L. (2011, July 12). Impact of the Business Environment on Output and Productivity in Africa. Papers.ssrn.com. https://ssrn.com/abstract=1884563
  • Bah, E. H., & Fang, L. (2015). Impact of the business environment on output and productivity in Africa. Journal of Development Economics, 114, 159-171.
  • Block, M. Á. G., Morales, H. R., Hurtado, L. C., Balandrán, A., Méndez, E., & World Health Organization. (2020). Mexico: health system review.
  • Cantwell, J. (2003). Innovation and competitiveness. Revised Version of Chapter 21, Handbook of Innovation, Oxford University Press.
  • CBInsights (2019). Fintech In Mexico: 80+ Startups Bringing Financial Innovation To the Region. Retrieved from https://www.cbinsights.com/research/mexico-fintech-market-map-expert-intelligence/. Accessed May 4, 2023.
  • Cloutier, O., Felusiak, L., Hill, C., & Pemberton-Jones, E. J. (2015). The importance of developing strategies for employee retention. Journal of Leadership, Accountability & Ethics, 12(2).
  • Congressional Research Service (2017). U.S.-Mexican Security Cooperation: The Mérida Initiative and Beyond. Retrieved from https://crsreports.congress.gov/product/pdf/R/R41349. Accessed May 4, 2023.
  • de la Cruz, E. L. (2016). Workforce Training: It’s the Law in Mexico. Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/global-hr/pages/workforce-training-is-the-law-in-mexico.aspx. Accessed May 4, 2023.
  • Doğan, E. (2016). The effect of innovation on competitiveness. Istanbul University Econometrics and Statistics e-Journal, (24), 60-81.
  • Dumas, A., & Hanchane, S. (2010). How does job‐training increase firm performance? The case of Morocco. International Journal of Manpower, 31(5), 585-602.
  • Escaith, H. (2001). The Small Economies of Latin America and the Caribbean. CEPAL Review, 74, 67-81.
  • Escribano, A., Guasch, J. L., & Pena, J. (2010). Assessing the impact of infrastructure quality on firm productivity in Africa: cross-country comparisons based on investment climate surveys from 1999 to 2005. World Bank Policy Research Working Paper, (5191)
  • Falciola, J., Jansen, M., & Rollo, V. (2020). Defining firm competitiveness: A multidimensional framework. World Development, 129, 104857.
  • Fay, M., Han, S., Lee, H. I., Mastruzzi, M., & Cho, M. (2019). Hitting the Trillion Mark--A Look at How Much Countries Are Spending on Infrastructure. World Bank Policy Research Working Paper, (8730).
  • Fogel, G. (2001). An analysis of entrepreneurial environment and enterprise development in Hungary. Journal of Small Business Management, 39(1), 103-109.
  • Fonseka, M. M., Tian, G. L., & Li, L. C. (2014). Impact of financial capability on firms’ competitiveness and sustainability: Evidence from highly regulated Chinese market. Chinese Management Studies, 8(4), 593-623.
  • Forbes (2015). Mexico’s Manufacturing Sector Continues to Grow. Retrieved from https://www.forbes.com/sites/stratfor/2015/04/08/mexicos-manufacturing-sector-continues-to-grow/?sh=21b3c9a95764. Accessed May 4, 2023.
  • Gaviria, A. (2002). Assessing the effects of corruption and crime on firm performance: Evidence
  • from Latin America. Emerging Markets Review, 3(3), 245-268.
  • Hair J, Babin B, Anderson R, Black W (2018). Multivariate Data Analysis, Chapter 01: Overview of Multivariate Analysis. 8th edition, Publisher: Cengage (2018).
  • Heintz, J., Pollin, R., & Garrett-Peltier, H. (2009). How infrastructure investments support the
  • US economy: employment, productivity and growth. Political Economy Research
  • Institute (PERI), University of Massachusetts Amberst.
  • Kliestik, T., Valaskova, K., Lazaroiu, G., Kovacova, M., & Vrbka, J. (2020). Remaining financially healthy and competitive: The role of financial predictors. Journal of Competitiveness, (1).
  • Kleynhans, E. P. (2016). Factors determining industrial competitiveness and the role of spillovers. Journal of Applied Business Research (JABR), 32(2), 527-540.
  • Kotane, I., & Kuzmina-Merlino, I. (2012). ASSESSMENT OF FINANCIAL INDICATORS FOR EVALUATION OF BUSINESS PERFORMANCE. European integration studies, (6).
  • Msomi, T., & Olarewaju, O. (2021). Evaluation of access to finance, market and viability of small and medium-sized enterprises in South Africa. Problems and Perspectives in Management, 19(1), 281.
  • Powell, B., Manish, G. P., & Nair, M. (2010). Corruption, crime and economic growth. In Handbook on the Economics of Crime. Edward Elgar Publishing.
  • Reuters (2016). El Salvador declares drought emergency for first time ever. Retrieved from https://www.reuters.com/article/us-el-salvador-drought/el-salvador-declares-drought-emergency-for-first-time-ever-idUSKCN0XB2YM. Accessed May 4, 2023.
  • Salas, E. B. (2023). Water consumption volume in Panama 2011-2020. Retrieved from https://www.statista.com/statistics/720976/water-consumption-panama/. Accessed May 4, 2023.
  • Shaiken, H. (1994). Advanced manufacturing and Mexico: A new international division of labor? Latin American Research Review, 29(2), 39-71.
  • Simionescu, M., Pelinescu, E., Khouri, S., & Bilan, S. (2021). The Main Drivers of Competitiveness in the EU-28 Countries. Journal of Competitiveness, (1).
  • Su, D. & Yao, Y. (2017) Manufacturing as the key engine of economic growth for middle-income economies, Journal of the Asia Pacific Economy, 22:1, 47-70.
  • Teplicka, K. (2018). Taxes, License, and its Influence on Business Environment in Slovakia.
  • World Bank1 (2023). Access to electricity (% of population) – El Salvador. (Last updated 04 April 2023). Retrieved from https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=SV. Accessed May 4, 2023.
  • Wang, C., Lim, M. K., Zhang, X., Zhao, L., & Lee, P. T. W. (2020). Railway and road infrastructure in the Belt and Road Initiative countries: Estimating the impact of transport infrastructure on economic growth. Transportation Research Part A: Policy and Practice, 134, 288-307.
  • World Bank2 (2023). Access to electricity (% of population) – Mexico. (Last updated 04 April 2023). Retrieved from https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=MX&most_recent_year_desc=true. Accessed May 4, 2023.
  • World Bank3 (2023). Access to electricity (% of population) – Panama. (Last updated 04 April 2023). Retrieved from https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=PA. Accessed May 4, 2023.
  • World Bank4 (2023). Enterprise Surveys. What Businesses Experience, Retrieved from https://www.enterprisesurveys.org/en/data. Accessed December 4, 2023.
  • World Bank5 (2016). Strengthening Shared Prosperity in Panama: Fostering inclusive growth and better opportunities for the marginalized and vulnerable. Retrieved from https://www.worldbank.org/en/results/2016/09/22/strengthening-shared-prosperity-in-panama. Accessed May 4, 2023.
  • World Bank6 (2023). The World Bank in El Salvador. (Last updated 04 April 2023). Retrieved from https://www.worldbank.org/en/country/elsalvador/overview. Accessed May 4, 2023.
  • World Bank7 (2023). The World Bank in El Salvador. (Last updated 04 April 2023). Retrieved from https://www.worldbank.org/en/country/elsalvador/overview#2. Accessed May 4, 2023.
  • World Bank8 (2023). The World Bank in Mexico. (Last updated 04 April 2023). Retrieved from https://www.worldbank.org/en/country/mexico/overview. Accessed May 4, 2023.
  • World Bank9 (2023). The World Bank in Mexico. (Last updated 04 April 2023). Retrieved from https://www.worldbank.org/en/country/mexico/overview#3. Accessed May 4, 2023.
  • World Bank10 (2023). The World Bank in Panama. (Last updated 04 April 2023). Retrieved from https://www.worldbank.org/en/country/panama/overview. Accessed May 4, 2023.
  • World Bank11 (2024). Enterprise Surveys. What Businesses Experience, Retrieved from
  • https://www.enterprisesurveys.org/en/methodology. Accessed April 2, 2024.
  • United Nations Office on Drugs and Crime (2016). Panama becomes the first country to join CRIMJUST. Retrieved from https://www.unodc.org/unodc/en/drug-trafficking/crimjust/news/panama-becomes-first-country-to-join-crimjust.html. Accessed May 4, 2023.
  • U.S. Department of State (2017). 2016 Country Reports on Human Rights Practices: El Salvador. Retrieved from https://www.state.gov/reports/2016-country-reports-on-human-rights-practices/el-salvador/. Accessed May 4, 2023.
  • U.S. Department of State (2017). 2016 Country Reports on Human Rights Practices: Mexico. Retrieved from https://www.state.gov/reports/2016-country-reports-on-human-rights-practices/mexico/. Accessed May 4, 2023.
There are 56 citations in total.

Details

Primary Language English
Subjects Regional Development and Globalisation in International Economics
Journal Section Research Article
Authors

Scott Cohen 0000-0002-2727-703X

Victor Bahhouth 0000-0002-9377-0893

Rebecca Gonzalez-ehnes 0000-0003-2668-524X

Dena Breece 0009-0007-6855-8747

Early Pub Date December 15, 2024
Publication Date
Submission Date June 19, 2024
Acceptance Date December 3, 2024
Published in Issue Year 2024 Volume: 9 Issue: 2

Cite

APA Cohen, S., Bahhouth, V., Gonzalez-ehnes, R., Breece, D. (2024). Does Mexico Possess A Well-Developed Business Infrastructure And Environment Enabling Its Manufacturing Firms To Assume A Leading Role Over Countries In Central America?. JOEEP: Journal of Emerging Economies and Policy, 9(2), 348-359.

JOEEP is published as two issues per year June and December and all publication policies and processes are conducted according to the international standards. JOEEP accepts and publishes the research articles in the fields of economics, political economy, fiscal economics, applied economics, business economics, labour economics and econometrics. JOEEP, without depending on any institution or organization, is a non-profit journal that has an International Editorial Board specialist on their fields. All “Publication Process” and “Writing Guidelines” are explained in the related title and it is expected from authors to Show a complete match to the rules. JOEEP is an open Access journal.