Is Mexico a Lumpy Country?

Andrew Bernard, Raymond Robertson and Peter Schott

Review of International Economics, 2010, vol. 18, issue 5, 937-950

Abstract: 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.

Date: 2010
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https://doi.org/10.1111/j.1467-9396.2010.00918.x

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Working Paper: Is Mexico A Lumpy Country? (2004)
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