Local poverty reduction in Chile and Mexico: The role of food manufacturing growth

Produced by: 
Universidad Ibero Ciudad de México
Available from: 
October 2014
Paper author(s): 
Isidro Soloaga (Department of Economics, Universidad Iberoamericana, Mexico City. Mexico)
Chiara Cazzuffi
Mariana Pereira
Topic: 
Agricultural - Natural Resource Economics
Poverty - Inequality - Aid Effectiveness
Year: 
2014

This paper analyses the relationship between local poverty and food manufacture growth in Chile and Mexico using propensity score matching, differences in differences and spatial econometrics methods. We focus on food manufacture as a sector with a number of characteristics that make it potentially pro-poor, and whose incentives for spatial distribution may either strengthen or dampen its poverty reduction potential. The overall results indicate that i) geographically, food manufacture locates in relatively poor areas, but not in the poorest; ii) food manufacture tends to locate in municipalities with more availability of labor and raw materials and with better infrastructure; iii) controlling for other factors, food manufacture growth contributes to local poverty reduction both in terms of magnitude and speed.

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