Mexico's regional output convergence after NAFTA: a dynamic panel data analysis.

This paper examines Mexico's output convergence across its 32 states for 1993-2006, a period including the start of NAFTA. Employing dynamic panel data methods, our estimates provide interesting new results. First, we find positive rates of output absolute convergence across Mexican regions: varying from 1.5% for the years 1993-2006 to 9.4% for the years 1996-2006. Second, trade, capital inflows and international migration exert positive effects on output per capita growth. Third, rolling panels suggest the Border-North region faces increasing output convergence speed (from 8.9 to 11.2%), while the South-Center experiences a declining trend (from 12 to 7.6%) more recently. [ABSTRACT FROM AUTHOR]