Toward Sustainable Economic Growth: A Spatial Panel Data Analysis of Regional Income Convergence in US BEA Economic Areas

Up Lim and Donghyun Kim
Additional contact information
Up Lim: Department of Urban Planning and Engineering, Yonsei University, 50 Yonsei-ro, Seodaemun-gu, Seoul 120-749, Korea
Donghyun Kim: Korea Environment Institute, 370 Sicheong-daero, Sejong 339-007, Korea

Sustainability, 2015, vol. 7, issue 8, 1-17

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.

Keywords: regional income convergence; sustainable economic growth; spatial effects; spatial panel data analysis; functional areas (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2071-1050/7/8/9943/pdf (application/pdf)
https://www.mdpi.com/2071-1050/7/8/9943/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:7:y:2015:i:8:p:9943-9959:d:53130

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().