A STOCHASTIC WALK DOWN MEXICO’S MESOAMERICAN FRONTIER, 1990-2011

Gregory Brock () and Constantin Ogloblin

Applied Econometrics and International Development, 2015, vol. 15, issue 2, 99-114

Abstract: Local economic growth 1990-2011 along Mexico’s southern border is analyzed using a stochastic production function with subject-specific fixed effects and the convergence literature. An underlying Translog technology fits the data well with excess physical capital and labor evident. Local border economies converged following a neoclassical growth paradigm though growth in total factor productivity was negative due to diseconomies of scale. Mean technical efficiency is quite low (31%) with relatively lower efficiency on the Mexican side of the frontier. A greater focus on the economic development of municipios located directly on either side of the border is suggested along with investments designed to improve technical change.

Keywords: Border Economy; Municipios; Efficiency. (search for similar items in EconPapers)
JEL-codes: O18 O47 R11 (search for similar items in EconPapers)
Date: 2015
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