Analysis on the economic growth of cities of the state of Bahia: a test of the theory of income convergence

Abstract

In face of the problem of regional income inequality in Bahia, this paper investigates the behavior of the GPD per capita in the cities of Bahia, verifying the existence of a trend to reduce these economic disparities among the cities from 1996 to 2010, which would confirm a process of income convergence in Bahia. To do so, it was used a nonlinear multiple regression model by the method of Ordinary Least Squares (OLS), with data collected from 417 cities in the state of Bahia in a cross-section analysis. The results indicate a reduction in disparities of the GPDs per capita, confirming the income convergence amongst the cities in Bahia. Furthermore, the results show the importance of human capital to improve the income growth of the cities of Bahia.

Keywords

• Economic Growth
• Regional economic inequalities
• Income convergence
• Bahia