Volume 44, Number 174,
July-September 2013
Manufacturing Entrepreneurship
and Development in the Mexican States
Martín Ramírez Urquidy, Manuel Bernal and Roberto Fuentes
Hypothesis and Empirical Models

The purpose of this research was to empirically determine whether there is an entrepreneurial pattern associated with the level of state development in Mexico. The degree of development was estimated using state competitiveness, based on the imco state competitiveness (ic) index. The ic is a more precise reflection of the level of state development, because besides the gdppc, it includes indicators regarding institutional aspects, infrastructure, factors, human capital, science, technology, innovation and the environment, among others, which are extremely important in defining development. The topics encompassed by the ic are as follows: a reliable and objective legal system, sustainable environmental management, a conclusive, trained and healthy society, dynamic and stable economy, stable and functional political system, efficient market, global quality resources sector, efficient and effective governance, good usage of foreign relations and economic sectors with potential. The business structure is grouped into enterprises with 0-2, 3-10 and more than 10 employees, assuming that the size of an enterprise is linked to the entrepreneurial capacity, business talent and management skills of its owners (Lucas, 1978). This means that the owners of self-employment enterprises, such as those with 0-2 employees, tend to have lower skills and entrepreneurial capacity than owners of enterprises with more employees.

An ic component known as economic sectors with potential, is incorporated to strengthen the analysis of the business structure and entrepreneurial capacity of the states. The variables included here reflect the entrepreneurial capacity (ice), encompassing industrial gdp, services gdp, number of large enterprises, invention coefficients, number of companies with ISO 9000, efficiency in water consumption, researchers, fellows, aggregate value of the manufacturing, maquiladora and export services industries, companies ranked in the top 500, gross formation of fixed capital and talent. This indicator provides additional perspective on business skills and entrepreneurship.

This study proposes the hypothesis that the economic development of the states affects their business structures and entrepreneurial capacity, which means that higher development levels correspond to larger-scale business structures, compatible with better entrepreneurial capacity. This may explain why states throughout the nation differ in their business structures. States with low levels of development have relatively more small-scale entrepreneurial endeavors, while those with higher development demonstrate more large-scale entrepreneurship. This means that as development progresses, the distribution of entrepreneurship becomes biased towards small, but large-scale, enterprises, which is a reflection of entrepreneurial capacity.

To address this hypothesis, this study defined the econometric models provided in equations 1 and 2. These were estimated using the random effects panel data method, as suggested by the Breusch-Pagan specification tests and Hausman procedures.


i = 1, 2 … 28 and t = 1 and 2


i = 1, 2 … 28 and t = 1 and 2

In equation 2, refers to the logarithm of the proxy variables for the proportion of companies in category E of state i in time period t. The proportion is measured as the ration between the number of companies of each type and the total companies in the manufacturing sector of each state. Types of enterprises E refer to those with 0-2, 3-10 and more than 10 employees. The periods in question given by t refer to the inegi economic censuses of 2004 and 2009, which contain information for 2003 and 2008, built with a common methodology and approach. The second equation incorporates the independent variable of the entrepreneurial capacity of the states as measured by the ice in state i in period t, as the imco designed it.

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Published in Mexico, 2012-2018 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 195 October-December 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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