Key productive linkages for the Mexican economy: An interregional input-output analysis

The central objective of this work is to identify the most important state-sectors for the Mexican economy based on their productive linkages through the applica-tion of the hypothetical extraction method within the framework of interregional input-output analysis. The most important state-sectors tend to concentrate in the central subregion of the country, especially in Mexico City and Estado de Mexico; in the northeast subregion, particularly in Nuevo Leon, and in the southeastern oil subregion. The most important productive chain due to its backward and forward linkages is associated with petroleum mining and petroleum derivatives, chemicals, and plastics. Electrical, electronic, and transportation products show considerable backward linkages but have a high export orientation accompanied by intensive use of imported inputs. Services located in the biggest metropolitan areas of the coun-try are another important sector for the economy. The results of this work provide inputs for the formulation of a regional industrial policy and for the study of the effects of economic crises on Mexico's state level productive structure. Ultimately, progress must be made toward sectoral diversification and the integration of federal entities and subregions that present the greatest disconnection.