REGIONAL GROWTH AND DEVELOPMENT IN MEXICO AND SOUTH KOREA: A COMPARATIVE ANALYSIS OF KALDOR’S LAWS

Resumen

The growth and economic development of Mexico and South Korea have followed different paths in recent decades. Since the 1980s, Mexico’s economy has grown slowly, not allowing it to move onto a fast growth path like Korea’s. The empirical evidence shows that in Korea growth is determined endogenously: manufacturing has been the pivot for development by heading sectoral growth and that of the productivity of labor. In Mexico, the opposite case, the empirical evidence shows that there is no endogenous growth and no sectoral leadership to broaden and maintain a robust labor market. This has an impact on the country’s long term growth path. In addition, Korean manufacturing growth leads to spill-over effects in a series of regions, which sparks positive spatial externalities; in Mexico on the other hand, the sector’s slow growth has not translated into a source of regional growth in the years 1998-2008.