Panel Data Stochastic Convergence Analysis of the Mexican Regions

Josep Carrion-i-Silvestre and Vicente German-Soto ()

No 200805, IREA Working Papers from University of Barcelona, Research Institute of Applied Economics

Abstract: The stochastic convergence amongst Mexican Federal entities is analyzed in panel data framework. The joint consideration of cross-section dependence and multiple structural breaks is required to ensure that the statistical inference is based on statistics with good statistical properties. Once these features are accounted for, evidence in favour of stochastic convergence is found. Since stochastic convergence is a necessary, yet insufficient condition for convergence as predicted by economic growth models, the paper also investigates whether beta-convergence process has taken place. We found that the Mexican states have followed either heterogeneous convergence patterns or divergence process throughout the analyzed period.

Keywords: Stochastic convergence; beta-convergence; non-stationarity panel data tests; cross-section dependence; multiple structural breaks. (search for similar items in EconPapers)
JEL-codes: C12 C22 C32 O40 R11 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2008-04, Revised 2008-04
New Economics Papers: this item is included in nep-geo
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Citations: View citations in EconPapers (29)

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Journal Article: Panel data stochastic convergence analysis of the Mexican regions (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ira:wpaper:200805

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