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Panel data stochastic convergence analysis of the Mexican regions

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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, but not sufficient, condition for convergence as predicted by economic growth models, the paper also investigates whether β-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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Abbreviations

ADF:

Augmented Dickey-Fuller

BIC:

Bayesian information criterion

GDP:

Gross domestic product

iid:

Identically and independent distributed

OECD:

Organisation for economic co-operation and development

OLS:

Ordinary least squares

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Authors and Affiliations

  1. AQR-IREA Research Group, Department of Econometrics, Statistics and Spanish Economy, University of Barcelona, Av Diagonal 690, 08034, Barcelona, Spain

    Josep Lluís Carrion-i-Silvestre

  2. Facultad de Economía, Universidad Autónoma de Coahuila, Unidad Camporredondo Edificio “E”, Planta Baja, CP 25280, Saltillo, Mexico

    Vicente German-Soto

Authors
  1. Josep Lluís Carrion-i-Silvestre
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  2. Vicente German-Soto
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Corresponding author

Correspondence to Josep Lluís Carrion-i-Silvestre.

Additional information

The authors gratefully thank the comments and suggestions from one anonymous referee. We also acknowledge financial support from CICYT Project SEJ2005-08646/ECON (Josep Lluís Carrion-i-Silvestre) and Grant PROMEP/103.5/02/1168 of Secretaría de Educación Pública (SEP) and Universidad Autónoma de Coahuila (Vicente German-Soto).

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Carrion-i-Silvestre, J.L., German-Soto, V. Panel data stochastic convergence analysis of the Mexican regions. Empir Econ 37, 303–327 (2009). https://doi.org/10.1007/s00181-008-0234-x

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