International synchronization of the Mexican states business cycles: Explaining factors

Pablo Mejía-Reyes, Liliana Rendón-Rojas, Reyna Vergara-González, Patricio Aroca

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5 Scopus citations

Abstract

The aim of this paper is to identify the explaining factors of the synchronization of the business cycles of the Mexican states and those of the US economy. The cycle indicator is obtained by de-trending the series of total formal employment (Mexican states) and nonfarm employment and industrial production (US). In general, our panel data model estimations suggest the existence of spatial autocorrelation and significant time-period fixed effects. Also, the estimates indicate a significant and positive effect of the ratio of foreign direct investment to gross domestic product (GDP), which may be supplementing the impact of international trade (driven by the most internationally integrated states) and a negative effect of the ratio of remittances to GDP (driven by less integrated states). Finally, the evidence suggests that more similar productive structures yield more synchronized business cycles.

Original languageEnglish
Pages (from-to)278-288
Number of pages11
JournalNorth American Journal of Economics and Finance
Volume44
DOIs
StatePublished - Apr 2018

Keywords

  • Growth cycles
  • International synchronization
  • Mexican states
  • Sub-national business cycles

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