Local poverty reduction in Chile and Mexico: The role of food manufacturing growth
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This paper analyzes the relationship between local poverty and food
manufacturing growth in Chile and Mexico using propensity score matching,
differences in differences and spatial econometrics methods. We focus on food
manufacturing 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 manufacturing locates in relatively poor areas, but not in the
poorest; ii) food manufacturing tends to locate in municipalities with more
availability of labor and raw materials and with better infrastructure; iii)
controlling for other factors, food manufacturing growth contributes to local
poverty reduction both in terms of magnitude and speed.