Convergence in Brazil: new evidence using a multilevel approach

Empirical analysis of regional convergence does not focus its attention on the spatial level of the data. Most of the time, the analysis is made at the aggregated level, by large regions or states, where there are more data available. However, when there is a wide intra-regional heterogeneity, it is possible to have regional convergence coexisting with local processes of divergence. This is our hypothesis for the case of Brazil, where there are relevant different intra-state behaviours. To capture these behaviours in this article, an adaptation of multilevel techniques to the $${\rm{\beta }}$$β -Convergence analysis is proposed using data of Brazilian states and municipalities taken from the Economic Census (1991 to 2010). With this data, we confirm the existence of convergence at the national level, but we can observe that this general trend coexists with different intra-state behaviours across Brazilian geography. The most industrialized or urbanized states of the Southeast usually present internal divergence, while the less developed inland states normally show convergence, which agrees with what we expect from the central/periphery models.