Total factor productivity and cost reduction in the Mexican manufacturing industry, 1994-1999

Abstract

The article analyzes total factor productivity in the mexican manufacturing industry in the period from 1994 to 1999. Applying the methodology proposed by Harberger (1998), the change in this variable is interpreted as a reduction or a real increment of costs. It was possible to identify both those subsectors and industrial classes that reduced or increment costs and the magnitude of these changes in monetary terms. In general, significant reduction of costs within a subsector of an industrial class was rare, while there were minor reductions or increments in the other classes.