Mexico's North-South divide: The regional distribution of state inefficiency 1988-2008.

In this paper, we estimate the technical efficiency of Mexican states using stochastic production frontier models. The empirical section uses panel data over the period 1988-2008. A distinctive feature of the paper is the use of socioeconomic and location data in order to control for the heterogeneity of the states. We find that crime rate negatively affects the efficiency of the states and that its effect is only significant after a certain level. Our results also show that education and productive specialization shift the production frontier upwards. [ABSTRACT FROM AUTHOR]