Public support for business innovation in Mexico: a cross-sectional analysis

Abstract

Public support for business innovation in Mexico: a cross-sectional analysis. Regional Studies. This paper explores the impact of government support in Mexico on the likelihood of firms achieving functional and/or inter-sectoral upgrading in global value chains (GVCs). Employing a unique dataset, regression analysis was undertaken to estimate the predicted probabilities of firms upgrading in GVCs considering their regional location. The results suggest that firms located in Mexico City are more likely to achieve functional upgrading vis-à-vis northern firms. Additionally, the presence of a research and development laboratory is crucial if firms are to engage in upgrading. There was no evidence that government support affects the likelihood of firms achieving functional and/or inter-sectoral upgrading. RÉSUMÉLe soutien gouvernemental en faveur de l'innovation en entreprise au Mexique: une analyse transversale. Regional Studies. Ce présent article examine l'impact du soutien gouvernemental au Mexique sur la possibilité que les entreprises réalisent une mise à niveau fonctionnelle et/ou intersectorielle aux chaînes de valeur mondiales. Employant un ensemble de données original, une analyse de régression est faite pour estimer la probabilité que les entreprises qui modernisent leurs chaînes de valeur mondiales remettent en question leur localisation régionale. Les résultats laissent supposer que les entreprises situées à Mexico sont plus susceptibles de réaliser une mise à niveau fonctionnelle par rapport aux entreprises du nord. En outre, la présence d'un laboratoire de recherche et de développement est essentielle si les entreprises sont à investir dans la mise à niveau. Rien ne prouve que le soutien gouvernemental influence la possibilité que les entreprises réalisent une mise à niveau fonctionnelle et/ou intersectorielle. MOTS-CLÉSpolitique en faveur de l'innovation en entreprise; pays en voie de développement; mise à niveaux aux chaînes de valeur mondiales; analyse par groupe témoin double; hétérogénéité régionale RESUMENApoyo público para la innovación empresarial en México: un análisis transversal. Regional Studies. En este artículo analizamos qué efecto tienen los apoyos gubernamentales en México para que las empresas tengan más posibilidades de lograr una mejora funcional y/o intersectorial en las cadenas globales de valor. A partir de una base de datos propia, llevamos a cabo un análisis de regresión para calcular las probabilidades de mejora de las empresas en las cadenas globales de valor tomando en consideración su ubicación regional. Los resultados indican que las empresas ubicadas en la ciudad de México tienen más probabilidades de conseguir mejoras funcionales en comparación con las empresas del norte. Asimismo la presencia de un laboratorio de investigación y desarrollo en las empresas es fundamental para asegurar dichas mejoras. No hay indicios de que el apoyo gubernamental afecte significativamente a la probabilidad de que las empresas consigan mejoras funcionales y/o intersectoriales....

Governance, Information Spillovers, and Productivity of Local Firms: Toward an Integrated Approach to Foreign Direct Investment and Global Value Chains

“…Similarly, Simona and Axèle () empirically analyze the impacts of different types of GVC governance on the knowledge transfer from foreign firms to local suppliers in the Polish automotive industry and find that long‐term trust‐based relationships promote knowledge transfer. Martinez‐Covarrubias, Lenihan, and Hart () also find that relational suppliers with higher technological capabilities are more likely to achieve functional upgrading in Mexico.…”

“…Indeed, many case studies find that local suppliers in developing countries often achieve process and product upgrading but face difficulties in functional upgrading (Schmitz and Knorringa ; Navas‐Alemán ; Rossi ; Ponte et al ). Moreover, functional upgrading requires local suppliers to have advanced technological capabilities that most of them do not have (Martinez‐Covarrubias, Lenihan, and Hart ). However, a recent survey of GVC case studies by Choksy, Sinkovics, and Sinkovics () concludes that functional upgrading is a key determinant of increased profit margins for suppliers in developing countries.…”

Advice to Entrepreneurs and Small Business

“…Studies show evidence of benefits in the literature (e.g. Chrisman and McMullan 2000, Chrisman and McMullan 2004, Chrisman et al 2005, Cumming and Fischer 2012, Cumming et al 2015, Drews and Hart 2015, Martinez-Covarrubias, Lenihan and Hart 2017, Roper et al 2001, Rotger et al 2012, Wren and Storey 2002. In addition evidence supports a greater outcome from more intensive assistance, which disproportionately boosted the number of jobs created by the firms even accounting for its greater cost (Mole et al 2011, Barbera and Hasso 2013, Cumming and Fischer 2012.…”

State policies and upgrading in global value chains: A systematic literature review

“…Several reasons motivate the co-existence of economic up and downgrading dynamics. In the case of trade facilitation or protective regulatory measures, economic upgrading outcomes are found to be heterogeneous across firms: some firms are favored by policy initiatives, whereas others (often the smallest ones or those located in rural areas) are left behind (Martinez-Covarrubias et al, 2017;Yoshida, 2017) 11 . A similar dynamic is observed in relation to social upgrading, where heterogeneities at the worker level also emerge .…”