Lall, Somik V.Ghosh, Sudeshna2013-09-042013-09-042002-02https://hdl.handle.net/10986/15612The authors analyze the determinants of firm productivity in a group of Mexican firms. In particular, they test the contribution of external factors such as trade and knowledge diffusion, the availability of infrastructure, informal knowledge exchange, competitive environment, and business regulatory climate. The authors find that one factor consistently emerges as an important proximate source of productivity-access to informal networks. Interaction in the form of "business lunches" with local buyers and suppliers, competitors, government officials, and other professionals have a significant and positive effect on a firm's productivity. Access to regulators and agents of backward and forward linkages are important in settings where information on business practices and regulations is not publicly disclosed. The results complement predictions of traditional growth theory-in addition to technology and learning being the driving force of firm productivity, proximity to influential individuals who can grant favors or provide information advantage on business and trade practices have significant productivity impacts.en-USCC BY 3.0 IGOFIRMSPRODUCTIVITYINFRASTRUCTURE DEVELOPMENTINFORMAL ORGANIZATIONSINFORMATION EXCHANGEINFORMATION DISSEMINATIONCOMPETITIVENESSBUSINESS ENVIRONMENTREGULATORY FRAMEWORKBUSINESS NETWORKSACCESS TO INFORMATIONBUSINESS PROCESS MODELSACCESS TO INFORMATIONINFORMAL MEETINGSLEARNINGINFLUENCE (PSYCHOLOGY)INFORMATION ANALYSIS AGRICULTUREBUSINESS ASSOCIATIONSCHAMBERS OF COMMERCECITIESCOMPETITIVE ADVANTAGECOMPETITIVE ENVIRONMENTCONSUMER PURCHASINGDECISION-MAKINGECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC EFFICIENCYECONOMIC GEOGRAPHYECONOMIC GROWTHECONOMIC HISTORYECONOMIC RESEARCHEMPIRICAL ANALYSISEMPIRICAL EVIDENCEEMPLOYMENTEXCHANGE RATEEXPORTSEXTERNALITIESFISCAL POLICYGOVERNMENT REGULATIONSGOVERNMENT SUBSIDIESGROWTH MODELSGROWTH RATEGROWTH THEORYHUMAN CAPITALIMPORTSINCREASING RETURNSINNOVATIONSKNOWLEDGE NETWORKSLABOR INPUTSLABOR PRODUCTIVITYLEARNINGLEGISLATIONMARKET COMPETITIONMONOPOLY RENTSPOLICY ENVIRONMENTPOLITICAL ECONOMYPRICE CONTROLSPRODUCTION FUNCTIONPRODUCTION INPUTSPRODUCTIVITYPURCHASING POWERREGRESSION ANALYSISRENT SEEKINGSUNK COSTSTAXATIONTECHNICAL ASSISTANCETECHNICIANSTECHNOLOGICAL CHANGETECHNOLOGICAL INNOVATIONSTECHNOLOGY ADOPTIONTRADE LIBERALIZATIONTRAINING PROGRAMSURBANIZATIONWAGESWEALTHWorld Bank10.1596/1813-9450-2789