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Does trade imply convergence? Analyzing the effect of NAFTA on the local convergence in Mexico

Author

Listed:
  • Alberto Díaz Dapena
  • Esteban Fernandez Vazquez
  • Rafael Garduño
  • Fernando Rubiera Morollón

Abstract

Regional Economics and Economic Growth focus on the question of 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 beta 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.

Suggested Citation

  • Alberto Díaz Dapena & Esteban Fernandez Vazquez & Rafael Garduño & Fernando Rubiera Morollón, 2015. "Does trade imply convergence? Analyzing the effect of NAFTA on the local convergence in Mexico," ERSA conference papers ersa15p282, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa15p282
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    References listed on IDEAS

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    Cited by:

    1. Gregory Brock, 2020. "The real Oaxaca decomposition: convergence within Mexico’s Oaxaca region in the twenty-first century—Do types of crime and religious belief matter?," Economic Change and Restructuring, Springer, vol. 53(4), pages 543-569, November.
    2. José Angel López González & Rodolfo Sócrates, 2016. "El proceso de convergencia regional en México: un anáisis de la dinámica de transición bajo heterogeneidad estatal y temporal," Working Papers DTE 602, CIDE, División de Economía.

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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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