A Stochastic Walk Down Mexico’s Mesoamerican Frontier, 1990-2011
Applied Econometrics and International Development
Local economic growth 1990-2011 along Mexico’s southern border is analyzed using a stochastic production function with subject-specific fixed effects and the convergence literature. An underlying Translog technology fits the data well with excess physical capital and labor evident. Local border economies converged following a neoclassical growth paradigm though growth in total factor productivity was negative due to diseconomies of scale. Mean technical efficiency is quite low (31%) with relatively lower efficiency on the Mexican side of the frontier. A greater focus on the economic development of municipios located directly on either side of the border is suggested along with investments designed to improve technical change.
Brock, Gregory J., Constantin Ogloblin.
"A Stochastic Walk Down Mexico’s Mesoamerican Frontier, 1990-2011."
Applied Econometrics and International Development, 15 (2): 99-114.