Premium
Is Mexico a Lumpy Country?
Author(s) -
Bernard Andrew B.,
Robertson Raymond,
Schott Peter K.
Publication year - 2010
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.2010.00918.x
Subject(s) - odds , abundance (ecology) , disjoint sets , economics , distribution (mathematics) , relative species abundance , comparative advantage , developing country , variation (astronomy) , aggregate (composite) , demographic economics , economic geography , econometrics , ecology , biology , international trade , logistic regression , economic growth , statistics , mathematics , physics , combinatorics , mathematical analysis , materials science , astrophysics , composite material
Courant and Deardorff (1992) show theoretically that an extremely uneven distribution of factors within a country can induce behavior at odds with overall comparative advantage. We demonstrate the importance of this insight for developing countries. We show that Mexican regions exhibit substantial variation in skill abundance, offer significantly different relative factor rewards, and produce disjoint sets of industries. This heterogeneity helps both to undermine Mexico's aggregate labor abundance and to motivate behavior that is more consistent with relative skill abundance.