Toward sustainable economic growth: A spatial panel data analysis of regional income convergence in US BEA economic areas

Up Lim, Donghyun Kim

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2 Citations (Scopus)

Abstract

A question fundamental to sustainable economic growth is whether a poor region tends to grow faster than a rich one, such that the poor region catches up with the rich region in terms of the level of per capita income. In this article, we apply the spatial panel data approach to the analysis of regional income convergence across 177 economic areas in the contiguous US states over the period from 1969 to 2009. Using data on per capita incomes in the functionally defined economic areas, we find that the absolute value of the estimated coefficient of the initial per capita income decreases in the spatial and time-period fixed effects spatial lag model and increases in the spatial and time-period fixed effects spatial error model. This result implies that the growth rate in a specific economic area will be not only directly affected by an exogenous shock introduced into that economic area but also be impacted more by both the indirect effects of the first-order neighboring economic areas and the induced effects of the higher-order neighboring economic areas. This gives helpful hints on the issue of spatial interaction and regional policy coordination to start a virtuous circle of sustainable economic growth.

Original languageEnglish
Pages (from-to)9943-9959
Number of pages17
JournalSustainability (Switzerland)
Volume7
Issue number8
DOIs
Publication statusPublished - 2015 Jan 1

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All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Renewable Energy, Sustainability and the Environment
  • Management, Monitoring, Policy and Law

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