Economic growth and convergence with quantile regression: a study to Rio Grande do Sul municipalities — 1970-01

Abstract

This paper studies the economic growth of the Rio Grande do Sul municipalities in the period from 1970 to 2001. For this goal, a new empirical methodology is proposed: the use of quantile regressions. In the paper, the obtained results are compared with ordinary least squares (OLS) estimations and significant differences are found. The hypotheses of absolute convergence and conditional are tested. The results showed the existence of absolute convergence in the period studied in most of the quantiles, however, these convergence taxes showed to be different along the conditional distribution. In the conditional convergence regressions other theoretical explanatory variables are incorporated. In the paper, the role of positive and negative externalities, government and market potential in the economic growth of the State's municipalities are discussed.