Does Trade Imply Convergence? Analyzing The Effect of NAFTA on The Local Convergence in Mexico

Alberto Díaz Dapena (), Esteban Fernández Vázquez (), Rafael Garduño Rivera and Fernando Rubiera Morollón
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Alberto Díaz Dapena: Universidad de Oviedo

No DTE 591, Working Papers from CIDE, División de Economía

Abstract: Regional Economics and Economic Growth focus on the question of whether trade leads to a greater concentration of economic activity. Yet little empirical work has assessed the regional convergence impacts of trade. Therefore this paper studies the regional convergence from trade in Mexico after NAFTA. Unlike previous papers, working with municipal-level data allows to observe more clearly the convergence patterns across space and to identify the effect of NAFTA, respectively. Result shows that after NAFTA, convergence in regions near the U.S. border grew faster than those further away. However, there is a significant reduction of the ß coefficient after NAFTA indicating a slowdown in the convergence rate. Additional, we find that those municipalities in the south have not been integrated in the world markets, and have, instead, lagged behind their counterparts after NAFTA.

Keywords: Convergence; clusters; international trade; NAFTA; Mexico (search for similar items in EconPapers)
JEL-codes: R11 R15 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2015-12
New Economics Papers: this item is included in nep-geo and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Does trade imply convergence? Analyzing the effect of NAFTA on the local convergence in Mexico (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:emc:wpaper:dte591

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