Convergence, divergence and stratification. Comparative study of dynamics of growth in manufacturing in Mexican towns and United States counties

摘要: In this document we analyze the dynamics of per capita value added in manufacturing as a proxy of per capita income of Mexico's municipalities and US counties. Specifically we seek to determine if there is convergence (absolute or conditional), divergence or stratification. A dynamic panel model without exogenous regressors is utilized, and the problem of bias in this specific context is considered. In general, it is concluded that the dynamics of per capita value added of US counties shows conditional convergence and low steady state dispersion. However, in the case of Mexico the dynamics is congruent with stratified growth. This study also finds that manufacturing growth in US counties and Mexican municipalities is divergent through time.