Neighborhood effects, convergence and growth in open economies of U.S. and Mexico

Abstract

This dissertation consists of three papers. "Optional sales tax holidays: Which jurisdictions participate? Logit and a spatial analyses," I reviewed the literature regarding strategic interaction among jurisdictions and border effects due to tax differentials. I used a logit model to estimate whether or not Missouri cities will participate or not in the 2004 sales tax holiday. I found that cities consider their own characteristics and their neighbor's characteristics when making the decision to participate in the tax holiday. I did not find evidence of spatial autocorrelation, perhaps because other variables already contain some spatial information. "Convergence of Mexican states, 1993-2004" examines the convergence implications of the Solow (1956) neoclassical economic growth model for Mexico. There is no evidence of unconditional [beta] convergence. There is evidence of conditional [beta] convergence and its value is 2.37 percent. There were mixed results for [sigma] convergence among Mexican states. "Disparities in Productivity Growth in Mexico, 1993-2004" examines the behavior of productivity among Mexican states for 1993-2004. I investments in physical capital are negatively related to productivity, states attracting labor force have higher productivity, human capital increases productivity. States with a higher percentage of indigenous population have lower productivity than the rest of the country.