DP10153 Innovation and Regional Growth in Mexico: 2000-2010

Author(s): Andrés Rodríguez-Pose, Edna Maria Villarreal Peralta
Publication Date: September 2014
Keyword(s): economic growth, innovation, Mexico, regional convergence, socio-economic conditions
JEL(s): O32, O33, R11, R12
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=10153

This paper looks at the factors driving regional growth in Mexico, paying special attention to the potentially growth-enhancing role of innovation and innovation policy. The analysis combines innovation variables with indicators linked to the formation of adequate social conditions for innovation (the social filter), and spillovers for 31 Mexican states and the Mexico City capital district (the Distrito Federal) during the period 2000-2010. The results indicate that regional economic growth across Mexican states stems from direct investment in R&D in areas with favorable social filters and which can benefit not only from knowledge spillovers, but also from being surrounded by rich neighbors with good social conditions. The results stress that, although Mexican innovation policy has been relatively well targeted in order to generate greater economic growth, its relatively modest size may have undermined the attainment of its main objectives.