Article
Strength in Diversity: A Spatial Dynamic Panel Analysis of Mexican Regional Industrial Convergence, 1960–2003
Comparative Economic Studies
(2015)
Abstract
Using a spatial dynamic panel, the long-run industrial sector convergence rate across Mexico’s states is found to be 2%. The model is a system-General Method of Moments with correction for spatial autocorrelation and an explicit human capital input. The significant inequality between the richest and poorest states is caused by differences in factor accumulation. Physical capital accumulation dominates in richer states while the human capital accumulation is in poorer states. Regional inequality is predicted to grow unless there is government intervention to address the bipolar regional divide. More investment in human capital in non-industrialized states to draw strength from Mexico’s diversity is recommended.
Keywords
- Mexico Regions Spatial Analysis
Disciplines
Publication Date
Spring March, 2015
Citation Information
Vicente German-Soto and Gregory J. Brock. "Strength in Diversity: A Spatial Dynamic Panel Analysis of Mexican Regional Industrial Convergence, 1960–2003" Comparative Economic Studies, Vol. 57, No. 1, 2015, pp. 183-202