Economic development spatial analysis of the State of Minas Gerais based on human capital and fixed capital

Abstract

This paper analyses the influences of human capital and fixed capital on economic development standards of cities in the State of Minas Gerais. Also, it considers the way these variables define regional development standards in that State. Spatial econometrics technique is used in the identification of spatial dependences between these cities. High per capita income clusters are found in cities surrounding Belo Horizonte city (the
State capital) and in the Western-Center region of Minas Gerais as well. Clusters of low per capita income are found in its Northern and Northeastern regions. These results confirm a development duality in that State. Similar pattern is found when education variable is linked to per capita income, meaning that cities with higher income are neighbored by cities with higher education degree. An opposite depiction is shown for low income cities. The spatial regression model shows that the human capital variable presents a much higher importance for the determination of economic growth standards than fixed
capital variable does