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Panel Data Stochastic Convergence Analysis of the Mexican Regions

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  • Josep Lluís Carrion-i-Silvestre

    ()
    (Faculty of Economics, University of Barcelona)

  • Vicente German-Soto

    ()
    (Facultad de Economía, Universidad Autónoma de Coahuila.)

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.

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Bibliographic Info

Paper provided by University of Barcelona, Research Institute of Applied Economics in its series IREA Working Papers with number 200805.

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Length: 32 pages
Date of creation: Apr 2008
Date of revision: Apr 2008
Handle: RePEc:ira:wpaper:200805

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Postal: Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona
Web page: http://www.ub.edu/irea/
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Keywords: Stochastic convergence; beta-convergence; non-stationarity panel data tests; cross-section dependence; multiple structural breaks.;

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