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Sustainability 2015, 7(8), 9943-9959; doi:10.3390/su7089943

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

1
Department of Urban Planning and Engineering, Yonsei University, 50 Yonsei-ro, Seodaemun-gu, Seoul 120-749, Korea
2
Korea Environment Institute, 370 Sicheong-daero, Sejong 339-007, Korea
*
Author to whom correspondence should be addressed.
Academic Editor: Marc A. Rosen
Received: 29 May 2015 / Revised: 6 July 2015 / Accepted: 20 July 2015 / Published: 24 July 2015
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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. View Full-Text
Keywords: regional income convergence; sustainable economic growth; spatial effects; spatial panel data analysis; functional areas regional income convergence; sustainable economic growth; spatial effects; spatial panel data analysis; functional areas
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Lim, U.; Kim, D. Toward Sustainable Economic Growth: A Spatial Panel Data Analysis of Regional Income Convergence in US BEA Economic Areas. Sustainability 2015, 7, 9943-9959.

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