Labor congestion in the automotive cluster: the role of wages

Purpose The purpose of this study is to investigate labor congestion in the automotive industry in Mexico. Design/methodology/approach By using the cluster and subcluster definitions by Delgado et al. (2016) and relying on an efficiency and production function perspective, this study estimates a sta...

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Bibliographic Details
Published inCompetitiveness review Vol. 28; no. 4; pp. 386 - 407
Main Authors Mendoza-Velazquez, Alfonso, Santillana, José Antonio, Zárate-Mirón, Viviana Elizabeth, Cabanas, Martha
Format Journal Article
LanguageEnglish
Published Bingley Emerald Publishing Limited 16.07.2018
Emerald Group Publishing Limited
Subjects
Automobile industry
Economic growth
Economic models
Efficiency
Growth rate
Hypotheses
Labor market
Layoffs
Production functions
Productivity
Profit maximization
Regions
Specialization
Standard deviation
Studies
Theory
Mexico
Productivity
Negative marginal returns
O25
E24
Competitiveness
D24
J21
Cluster
Congestion
Automotive
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Summary:Purpose The purpose of this study is to investigate labor congestion in the automotive industry in Mexico. Design/methodology/approach By using the cluster and subcluster definitions by Delgado et al. (2016) and relying on an efficiency and production function perspective, this study estimates a standard production function and measures marginal returns of labor at the regional cluster and subclusters levels. To assess whether wages affect the finding of congestion and productivity, the model also measures the individual impact of wages on both total productivity and marginal returns of labor. Findings Among other results, this paper finds evidence of labor congestion in the automotive cluster in Mexico. This congestion deepens with wages and it is specific to some regions and some subclusters. Research limitations/implications The methods used are based on panel data techniques but are fundamentally cross-section in nature. The time period available may condition these findings. Originality/value To the authors’ knowledge, this is the first study reporting congestion in the automotive cluster in Mexico.
ISSN:1059-5422
2051-3143
DOI:10.1108/CR-10-2016-0071