Industrial cluster governance in a developing country context: evidence from the petrochemical sector in the Mexican state of Veracruz
thesisposted on 2023-06-07, 16:21 authored by Adrian Duhalt Gomez
This thesis combines analysis of the political economy of Mexico with the global value chain approach to study the trajectory of the development of the Veracruz cluster and the governance structure of vertical inter-firm relationships in the locality. The petrochemical cluster located in the state of Veracruz is formed by a pool of state-owned and local private companies and is arguably the largest agglomeration of industrial firms in southern Mexico. These firms are linked to one another through output-input relationships. State-owned petrochemical complexes, which are part of Petróleos Mexicanos (PEMEX), Mexico's oil and natural gas company, supply industrial raw materials that local private firms use to process intermediate petrochemical inputs. Empirical evidence demonstrates that state-owned firms exercise a disproportionate degree of authority over input transactions. The latter assertion is illustrated by the fact that PEMEX-Petrochemicals is the only domestic producer (and therefore supplier) of a large number of inputs demanded in the locality. This, along with the hazardous nature of petrochemical inputs and spatial proximity, has contributed to locking local firms into captive transactional relationships. The significance of studying the Veracruz cluster and the nature of inter-firm transactional relationships lies in the fact that both are heavily influenced by drivers inherent in the development path the country has followed in past decades, which is characterised in the first place by the adoption of import-substituting industrialisation (ISI) policies in the 1960s and 1970s and later by the implementation of market-orientated policies in the 1980s and beyond. The discussion is therefore situated in a much broader empirical setting that pays considerable attention to economic, political, and institutional factors. For instance, external determinants such as the extent of state intervention in economic planning in the 1960s and 1970s, the economic liberalisation process embarked on by Mexico in the 1980s and 1990s, the institutionalisation of sectoral regulatory policies, the reliance of the government on PEMEX revenues, and the implications of the North American Free Trade Agreement (NAFTA), among others, will help us understand the trajectory of the petrochemical industry and the governance of inter-firm transactional linkages in southern Veracruz.
- Published version
Department affiliated with
- Geography Theses
InstitutionUniversity of Sussex
Full text available