An Application of the Kaldor-Dixon-Thirlwall Model for Regional Economic Growth in Mexico

Abstract

This paper analyzes the links between exports and regional economic growth in Mexico.  The Kaldor-Dixon-Thirlwall theoretical model and the econometric methodology of Durbin spatial panel models are used, which were estimated for the periods 2008-2019 and 2008-2023. The econometric results show, among other findings, that the relationship between regional growth and state export growth is null and non-significant, while trade openness and its absolute growth are positive and significant. The weak relationship between exports and regional growth implies that industrial policy proposals other than traditional ones should be promoted. A limitation of this study is the absence of data on regional imports, which could have enabled a more comprehensive examination of theoretical frameworks. Nonetheless,  the study's significance lies in highlighting the limited role of the export sector in driving regional growth in Mexico, attributed to the weakening of national productive links.