Empirical Evidence Of Verdoorns Law In Mexican Manufacturing

Torres, Lourdes Alicia González; Cisneros, Manuel Alejandro Ibarra; Hernández, Juan Manuel Ocegueda; Collado, Karla Emilia Cervantes

doi:10.19030/iber.v12i2.7632

Cited by 2 publications

(1 citation statement)

References 5 publications

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“…Torres et al (2013) found that their results were consistent with Verdoorn’s law when using the OLS method and data from 1985 to 2004 for Mexico. The results show that the states that showed reduced values for the Verdoorn factor (significant for raised yields) were those that experienced more growth than other states.…”

Section: Theoretical Framework and Literature Reviewsupporting

confidence: 63%

The relationship between manufacturing production and economic growth in the Kingdom of Saudi Arabia

Almosabbeh

Almoree

2018

JES

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Purpose The purpose of this paper is to examine the long-term relationship between the performance of the manufacturing sector and economic growth in Saudi Arabia. It does so by testing Kaldor–Verdoorn and Thirlwall’s laws. Design/methodology/approach The authors used data for the period 1980–2014 from databases of the World Bank, the Saudi Arabian Monetary Agency, the Penn World Table (PWT8) and the five-year plan of the Ministry of Planning and National Economy of Saudi Arabia. The authors used the bound test for the cointegration approach, which allowed them to test the two hypotheses in the long run, after examining the stability of the time series and ensuring the rank of its stability. Findings The results that emerged from the analysis show that Kaldor’s law is applicable to the data on the KSA, but with decreasing returns to scale, with coefficient equal 0.83. Verdoorn’s law is also applicable at both macro and sectoral levels with elasticity coefficient equal to 0.81 and 0.616, respectively, also with decreasing returns to scale. For Thirlwall’s model, the results show that the relationship was reverse, contrary to what expected, with a significant elasticity coefficient of 0.599. Social implications This study recommends that policy makers in the Kingdom of Saudi Arabia focus on the industrial sector because of its impact on productivity, social returns and other sectors of the economy. Originality/value One of the important aspects of this paper is that it tests both Kaldor–Verdoorn’s and Thirlwall’s laws in the case of countries that depend on oil exports for growth and where the contribution of industrial output to GDP, in Saudi Arabia, is relatively low, at about 13 percent, across the period 1970–2013, and about 16.8 percent between 2000 and 2013 (see Figure 1). Since there have been few studies on this subject, the authors used data from Saudi Arabia to provide evidence of the importance of diversifying the economy by increasing the contribution of manufacturing to GDP to ensure increased productivity and to promote economic growth.

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Section: Theoretical Framework and Literature Reviewsupporting

confidence: 63%

The relationship between manufacturing production and economic growth in the Kingdom of Saudi Arabia

Almosabbeh

Almoree

2018

JES

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An Application of the Kaldor-Dixon-Thirlwall Model for Regional Economic Growth in Mexico

Quintana Romero,

Mendoza González,

Valdivia López

2024

REMEF

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This paper analyzes the links between exports and regional economic growth in Mexico. The Kaldor-Dixon-Thirlwall theoretical model and the econometric methodology of Durbin spatial panel models are used, which were estimated for the periods 2008-2019 and 2008-2023. The econometric results show, among other findings, that the relationship between regional growth and state export growth is null and non-significant, while trade openness and its absolute growth are positive and significant. The weak relationship between exports and regional growth implies that industrial policy proposals other than traditional ones should be promoted. A limitation of this study is the absence of data on regional imports, which could have enabled a more comprehensive examination of theoretical frameworks. Nonetheless, the study's significance lies in highlighting the limited role of the export sector in driving regional growth in Mexico, attributed to the weakening of national productive links.

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Empirical Evidence Of Verdoorns Law In Mexican Manufacturing

Abstract: ABSTRACT

Cited by 2 publications

References 5 publications

The relationship between manufacturing production and economic growth in the Kingdom of Saudi Arabia

The relationship between manufacturing production and economic growth in the Kingdom of Saudi Arabia

An Application of the Kaldor-Dixon-Thirlwall Model for Regional Economic Growth in Mexico

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