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Location and Regional Income Disparity Dynamics: the Brazilian Case

Raul Silveira Neto (raul.silveirant@ufpe.br) and Carlos Azzoni

No 1-2005, TD NEREUS from Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS)

Abstract: In this paper we provide evidence on the importance of location for the growth of per capita income of Brazilian states over the period 1985-2001. The study presents strong evidence of spatial dependence, and that regional inequality reduction occurred simultaneously with increasing spatial autocorrelation. The analysis of local indicators of spatial association confirmed that conclusion, showing the existence of two geographical clusters, one of low income states in the Northeast and North regions, and another of rich states in the Southeast and South regions. The low value for the convergence coefficient, in conjunction with the strong influence of shocks in the residuals, indicate the existence of a very sensible dynamic of convergence across Brazilian states, what helps explaining the well documented persistence in regional income disparities in Brazil. After conditioning on other important variables that could affect growth, however, spatial dependence disappears. We have thus identified two potential channels through which the strong spatial dependence in the process of convergence of per capita income of Brazilian states occurs.

Keywords: Brazil; Income Convergence; Geographical Influences; Spatial Dependence (search for similar items in EconPapers)
JEL-codes: R11 R12 R15 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Location and regional income disparity dynamics: The Brazilian case* (2006) Downloads
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