Spatial Distribution of Economic Activity and Regional Inequalities: Evidence For the Municipalities of Minas Gerais – Brazil

Abstract

The study analyzes the concentration of economic activity in the municipalities of Minas Gerais, Brazil. In this way, the factors related to geographical location that may influence regional development inequality have taken to address. The level of economic activity in Minas Gerais, Brazil is analyzed from the concentration patterns of the productive structure captured by the Indicator of Municipal Economic Activity (IAEM). This Indicator identifies different dimensions of municipal development, such as external opening, labor market, banking activity and municipal collection. With this purpose, an econometric model with control for endogeneity
caused by the spatial distribution of the data has estimated. The main results provide evidence that reinforces the regional heterogeneity of the state and the importance of geographic location, agglomeration forces and transport infrastructure to the level of economic activity in the municipalities of Minas Gerais, Brazil.