Analysis of oil extractivism in Mexico and industry perspectives

Abstract

The extractivism is an economic growth model based on the exploitation of primary natural resources, little transformed, including oil, to be sold on the world market. Several countries, including Mexico, were inserted into an extractivist model, to obtain the highest possible income, through which their industrialization and development were financed; on the other hand, these resources have also been used to pay for growing public spending. The objective of this research work is to determine the impact of oil extractivism on the economic growth of Mexico. For which an econometric model was developed, by ordinary least squares, analyzing the period of time 1990-2020. The results obtained show negative effects associated with a high dependence on public finances toward oil extractivism, in addition, derived from the lack of transformation and improvements of the Mexican extractivism model, negative impacts are generated in the economy that, if not addressed, can trigger a domino effect with greater losses for the oil sector, which could lead to increasing the country risk, an aggravating the economic and social situation of the country in the medium term.