The Long Run Industrial Growth of Veracruz State, 1955-2008

Journal of Economic Studies, Vol. 41, No. 6, 2014, pp. 821-832.

13 Pages Posted: 7 Nov 2014 Last revised: 4 Nov 2015

See all articles by Gregory J. Brock

Gregory J. Brock

Georgia Southern University - Department of Economics

Date Written: November 6, 2014

Abstract

Growth is examined using a standard two input stochastic production function (SPF) that creates a measure of technical efficiency. Convergence is measured using a convergence equation from the literature but which also included the results from the SPF analysis to incorporate not only initial levels of inputs but also the ability of a municipio to utilize these inputs. A long run database of 149 municipios in Veracruz from 1960 thru 2008 is the sample. A stochastic Cobb-Douglas technology is found to fit the long run growth of Veracruz province well. In the 1960s, 2000s and the long run (1960-2008), weak evidence for the municipios in Veracruz converging with a relatively higher level of technical efficiency resulting in slower growth of industrial labor productivity is found. Some very recent improvement in technical efficiency may be the result of institutional as well as economic reforms finally allowing an exiting of inefficient firms that has kept the levels of municipio industrial technical efficiency stagnant for decades at about 70 percent.

Keywords: Convergence, Mexico, Long run industrial growth, Stochastic frontier, Veracruz, Cobb-Douglas technology

JEL Classification: R11, O15, O54

Suggested Citation

Brock, Gregory, The Long Run Industrial Growth of Veracruz State, 1955-2008 (November 6, 2014). Journal of Economic Studies, Vol. 41, No. 6, 2014, pp. 821-832. , Available at SSRN: https://ssrn.com/abstract=2520019

Gregory Brock (Contact Author)

Georgia Southern University - Department of Economics ( email )

P.O. Box 8153
Statesboro, GA 30460-8153
United States
912-478-5579 (Phone)

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