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Energy reform and energy consumption convergence in Mexico: A spatial approach

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  • Castellanos-Sosa, Francisco A.
  • Cabral, René
  • Mollick, André Varella

Abstract

This paper examines the convergence of energy consumption per capita (ECPC) in the 32 Mexican states from 2002 to 2017. Regardless of the recent Global Financial Crisis and Mexican Energy Reform, we first find evidence of a positive, increasing, and statistically significant spatial correlation of ECPC across states. Using cross-section and spatial dynamic econometric models, we document absolute and conditional β-convergence in ECPC during the pre-crisis, pre-Energy Reform, post-Energy Reform, and the whole study period. We report stable and larger convergence rates in spatial dynamic models, close to 20%, versus 3% without spatial effects. These figures suggest between-states relationships are crucial in Mexico. We also find an inverted U-shape relationship between ECPC and GDP per capita.

Suggested Citation

  • Castellanos-Sosa, Francisco A. & Cabral, René & Mollick, André Varella, 2022. "Energy reform and energy consumption convergence in Mexico: A spatial approach," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 336-350.
    • Handle: RePEc:eee:streco:v:61:y:2022:i:c:p:336-350
    DOI: 10.1016/j.strueco.2022.03.007
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    More about this item

    Keywords

    Convergence; Energy use; Mexico; Panel data; Spatial econometric model;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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