The Sustainability of Mexican Municipal Public Debt
Abstract
:1. Introduction
2. Literature Review
2.1. Institutional Background
2.2. Debt Sustainability Review
3. The Model
4. Empirical Methods
4.1. Data
4.2. Estimation Methods
5. Empirical Results
5.1. Main Results
5.2. Robustness Analysis
5.3. Monte Carlo Simulations
6. Conclusions
Author Contributions
Funding
Conflicts of Interest
References
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Variable | N | Min | Mean | Max | sd |
---|---|---|---|---|---|
Debt (in million pesos) | 1210 | 0 | 276.83 | 2711.92 | 413.04 |
Primary balance (in million pesos) | 1210 | 0 | 98.35 | 2567.46 | 193.98 |
Primary balance to guaranteed revenue ratio | 1210 | 0 | 0.14 | 2.31 | 0.20 |
Debt to guaranteed income ratio | 1210 | 0 | 0.29 | 2.58 | 0.28 |
Debt per capita (pesos) | 1210 | 0 | 643.61 | 4271.03 | 688.83 |
Political affinity | 1210 | 0 | 0.19 | 1 | 0.39 |
Credit Rating | 1102 | 1 | 2.70 | 9 | 1.29 |
2009 crisis dummy | 1210 | 0 | 0.09 | 1 | 0.29 |
Test Type | Variable | LLC Panel Unit Root Tests | |||
---|---|---|---|---|---|
N × T | Statistic | p-Value | Lags | ||
Intercept only | Debt to guaranteed resources ratio | 1210 | −13.167 *** | [0.000] | 0.1909 |
Intercept and trend | Debt to guaranteed resources ratio | 1210 | −22.235 *** | [0.000] | 0.3091 |
Intercept only | Primary deficit to guaranteed resources | 1210 | −25.59 *** | [0.000] | 0.2273 |
Intercept and trend | Primary deficit to guaranteed resources | 1210 | −28.282 *** | [0.000] | 0.3636 |
Dependent Variable Debt to Guaranteed Revenue | Main and Regional Partition Results | ||||
---|---|---|---|---|---|
Main | North Border | North Central | Central | South | |
Variables | (1) | (2) | (3) | (4) | (5) |
Lagged debt | 0.642 *** | 0.468 *** | 0.810 *** | 0.754 *** | 0.558 *** |
(0.067) | (0.134) | (0.237) | (0.099) | (0.151) | |
Primary balance | 0.310 *** | 0.302 ** | 0.289 *** | 0.277 *** | 0.418 *** |
(0.041) | (0.131) | (0.097) | (0.076) | (0.085) | |
Credit Rating | 0.014 ** | 0.021 | 0.020 *** | 0.019 | 0.014 |
(0.007) | (0.015) | (0.006) | (0.027) | (0.018) | |
Political affinity dummy | −0.027 | −0.072 * | 0.045 | −0.009 | −0.04 |
(0.019) | (0.043) | (0.041) | (0.024) | (0.062) | |
2009 crisis dummy | −0.004 | −0.009 | 0.079 | −0.011 | −0.075 * |
(0.017) | (0.05) | (0.05) | (0.032) | (0.042) | |
Constant | 0.026 | 0.111 * | -0.052 | −0.024 | 0.045 |
(0.025) | (0.057) | (0.073) | (0.069) | (0.069) | |
Implicit 𝝆 | −0.358 | −0.532 | −0.190 | −0.246 | −0.442 |
Number of observations | 1019 | 287 | 289 | 316 | 127 |
Number of instruments | 31 | 8 | 8 | 8 | 8 |
Number of municipalities | 110 | 30 | 31 | 35 | 14 |
AB (1) | −1.719 | −1.332 | −2.246 | −3.15 | −2.128 |
AB (1) p-value | [0.086] | [0.183] | [0.025] | [0.002] | [0.033] |
AB (2) | 1.105 | 1.034 | 0.882 | 0.263 | 1.334 |
AB (2) p-value | [0.269] | [0.301] | [0.378] | [0.792] | [0.182] |
Hansen test | 24.351 | 2.478 | 3.772 | 4.192 | 3.15 |
Hansen test p-value | [0.499] | [0.290] | [0.152] | [0.123] | [0.207] |
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del Castillo, E.; Cabral, R.; Saucedo, E. The Sustainability of Mexican Municipal Public Debt. Sustainability 2022, 14, 6558. https://doi.org/10.3390/su14116558
del Castillo E, Cabral R, Saucedo E. The Sustainability of Mexican Municipal Public Debt. Sustainability. 2022; 14(11):6558. https://doi.org/10.3390/su14116558
Chicago/Turabian Styledel Castillo, Ernesto, René Cabral, and Eduardo Saucedo. 2022. "The Sustainability of Mexican Municipal Public Debt" Sustainability 14, no. 11: 6558. https://doi.org/10.3390/su14116558
APA Styledel Castillo, E., Cabral, R., & Saucedo, E. (2022). The Sustainability of Mexican Municipal Public Debt. Sustainability, 14(11), 6558. https://doi.org/10.3390/su14116558