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Strength in Diversity: A Spatial Dynamic Panel Analysis of Mexican Regional Industrial Convergence, 1960–2003

Author

Listed:
  • Vicente German-Soto

    (Universidad Autónoma de Coahuila, Unidad Camporredondo, Edificio ‘E’, Planta Baja, CP 25280, Saltillo, México.)

  • Gregory Brock

    (Department of Finance & Economics, College of Business, Georgia Southern University, P.O. Box 8152, Statesboro, GA USA.)

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.

Suggested Citation

  • Vicente German-Soto & Gregory Brock, 2015. "Strength in Diversity: A Spatial Dynamic Panel Analysis of Mexican Regional Industrial Convergence, 1960–2003," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 57(1), pages 183-202, March.
    • Handle: RePEc:pal:compes:v:57:y:2015:i:1:p:183-202
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    Citations

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    Cited by:

    1. Vicente German-Soto & Gregory Brock, 2023. "Before the isolation: Russian regional β-convergence 2001–2019 before the pandemic and Ukrainian war," Economic Change and Restructuring, Springer, vol. 56(4), pages 2729-2746, August.
    2. Gregory Brock, 2020. "The real Oaxaca decomposition: convergence within Mexico’s Oaxaca region in the twenty-first century—Do types of crime and religious belief matter?," Economic Change and Restructuring, Springer, vol. 53(4), pages 543-569, November.
    3. Vicente German-Soto & Gregory Brock, 2022. "Overall US and Census Region β-Convergence 1963–2015 Controlling for Spatial Effects," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(1), pages 44-67, March.
    4. Brock, Gregory & German-Soto, Vicente, 2017. "Regional industrial informality and efficiency in Mexico, 1990–2013," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 928-941.
    5. Vítor João Pereira Domingues Martinho, 2021. "Impact of Covid‐19 on the convergence of GDP per capita in OECD countries," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(S1), pages 55-72, November.

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