[Related to the Apply the Concept on page 376] A study by the McKinsey Global Institute reported that labor productivity increased at an average annual rate of 5.8 percent between 1999 and 2013 in...

[Related to the Apply the Concept on page 376] A study

by the McKinsey Global Institute reported that labor productivity increased at an average annual rate of 5.8 percent between 1999 and 2013 in Mexico’s large companies,

but it fell at an average annual rate of 6.5 percent over the

same period for its smaller firms, such as family-owned

stores and bakeries. Briefly explain why productivity

growth would be much higher for Mexico’s largest companies than for its smaller companies.

Source: Anthony Harrup, “Two Economies Explain Mexico’s Productivity Quandary,” Wall Street Journal, March 27, 2014.