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Growth and concentration among the leading business groups in Mexico

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Growth and concentration among the leading business groups in Mexico

Author: Del Hierro, Patricia - Alarco Tosoni, Germán Physical Description: grafs., tabls. Date: August 2010 ECLAC symbol: LC/G.2455-P

Description

This article discusses various hypotheses relating to the originand operation of business groups in Mexico, and it proposes a model toexplain the sources of their total asset growth. It highlights their growingcontribution to Mexican gdp, but notes that their shares of employmentand profits are smaller. Over time, sales and assets have clearly tendedto become more concentrated in the largest groups. The paper concludesthat the main financing sources for asset growth between 2005 and 2007were firstly debt and secondly capital contributions from shareholders. Italso finds that the leading groups invest discretely over time and tend to"overinvest" to block the entry of other competitors.