Munich Personal RePEc Archive

Trade liberalization and regional income convergence in Mexico: a time-series analysis

Gómez, Manuel and Ventosa-Santaulària, Daniel (2007): Trade liberalization and regional income convergence in Mexico: a time-series analysis. Published in: El Trimestre Económico , Vol. LXXVI, No. 2 (2009): pp. 215-235.

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Abstract

We study the hypothesis of convergence amongst Mexican regions since 1940 with special interest in the post-trade liberalization period. A standard time-series convergence test shows that per capita income levels between the capital and the rest of the regions tend to narrow over time. Using the concept of deterministic and stochastic convergence, we describe the specific characteristics of the growth pattern for each of the regions. We find evidence that supports the hypothesis that trade reforms reversed the convergence process of some regions, especially those less developed. Results further suggest that trade liberalization did not contribute to per capita income convergence between the U.S. and Mexico border regions.

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