Is Korea’s Sustainable Growth Threatened by Regional Disparities? Evidence from Convergence Analysis of Income and Consumption

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

Dear colleagues!

I have studied the results of your research with great interest. It seemed to me original that the hypothesis about the prerequisites of differentiation draws attention to regional favoritism. Usually, different natural or economic conditions are called the causes of inter-regional differentiation. The methodological approach is clear and adequate, the analysis period is quite wide.

Some questions that I have not found answers to in the manuscript:

1. Has a spatial autocorrelation test been performed? This is important due to time series analysis.

2. To what extent were the crisis events in the selected time period taken into account when forming the clubs?

3. Sustainability magazine focuses on sustainable growth. Unfortunately, there are no sustainability indicators in the empirical part that prove the adequacy of the author's methodology for this requirement.

4. Add your own perspective on the development of the study and its limitations.

I wish you success!

Author Response

We would like to thank Referee 1 for his or her very useful comments.

Please see our detailed reply in the attached file.

Author Response File: Author Response.docx

Reviewer 2 Report

Comments and Suggestions for Authors

The manuscript investigates the dynamics of regional economic development in the Republic of Korea between 1998 and 2022. Specifically, the author employs the time-factor decomposition and club convergence framework developed by Phillips and Sul (2007) to analyze per-capita GDP and consumption across sixteen Korean regions.

The analysis is mostly sound and the paper is well structured and coherent. The application of the Phillips and Sul (2007) methodology to South Korean regionalism is novel.

The paper would benefit from some changes to enhance it.

• Drivers of the Urban-Rural Divide: The paper effectively identifies that convergence clubs are not geographically contiguous and points to an urban-rural divide. However, the manuscript lacks a detailed discussion of the economic mechanisms driving this phenomenon. It would greatly enhance the paper if the author could briefly hypothesize or discuss factors behind this.
• Policy Implications: In the abstract, the author mentions the need for "evidence-based regional development policies". The conclusion should expand on this. Given that historic assumptions of favoritism are not empirically supported by this 1998-2022 panel data, what specific types of policies should the Korean government pursue now to bridge the urban-rural gap?
• Data clarification: The authors should provide more details on the data. In particular, whether figures are deflated, PPP... Note that if they are real figures, differences in inflation could also be a potential driver of results.
• Avoid putting a linked reference in the abstract. Spell-out Phillips and Sul (2007).
• Regarding the theoretical setup, the explanation of Phillips and Sul (2007) methodology might bem too detailed. To make the paper more accessible a brief non-technical paragraph before the equations might help.  

Author Response

We would like to thank Referee 2 for his or her very useful comments.

Please see our detailed reply in the attached file.

Author Response File: Author Response.docx

Reviewer 3 Report

Comments and Suggestions for Authors

This paper investigates the regional economic development model of Korea and its influence on sustainable growth, which has certain practical significance. The following comments are for reference only: 
1. The sample period 1998 – 2022 covers major shocks such as the Asian financial crisis, the global financial crisis and the epidemic. It was not stated whether structural breakpoints or variations in different sub-periods were examined. If there is a difference in convergence between 1998 – 2008 and 2009 – 2022, the conclusion will be unstable. 
2. Some parts of South Korea (especially the southwest) have experienced long-term net population outflows and severe aging. If high-income young people move out, per capita GDP may "falsely converge" due to a decreasing denominator. Without controlling for demographic changes, the convergence conclusion may be misleading. 
3. Spatial autocorrelation is not considered. There is a strong spillover effect between regions (e.g. Daejeon and South Chungcheong Province). If the model ignores spatial dependencies, the estimation results may be biased. 
4. Consumption convergence is an important indicator of welfare analysis, but it does not distinguish between public consumption and private consumption, nor does it consider the cost of housing, non-monetary welfare (such as medical care and quality of education) and informal economy. The high cost of living in Seoul may make nominal consumption convergence underestimate the real welfare gap. 
5. At present, the conclusion is relatively vague. The recommendation at least points out that if club convergence exists, the unified regional policy may be ineffective, and differentiated policies should be designed for different clubs. 

Author Response

We would like to thank Referee 3 for his or her very useful comments.

Please see our detailed reply in the attached file.

Author Response File: Author Response.docx

Round 2

Reviewer 3 Report

Comments and Suggestions for Authors

I suggest accepting the paper.