Determinants of Agricultural Productivity in Mexico: Government Spending Perspectives

Abstract

In Mexico, the impact of agricultural activities on gross domestic product remains constant during recent years, despite the public policies implemented to promote the sector, which is paradoxical since is one of the Latin American countries that invest more public spending in the agricultural sector. We proceed with an analysis to identify the main determinants of agricultural productivity by including relevant variables as public spending, technological innovation, and international commerce. We contrast the relationships between variables using multivariant methodologies with time series from 2003 to 2018. In our evidence, it is important to highlight the negative impact of public spending and imports on agricultural sector productivity, therefore in the gross domestic growth. Additionally, a positive relationship is found for exports, remarking the relevance of international commerce to the country.