Convergence hypothesis of regional income in Korea

Abstract

Using data on per capita income among 13 regions in Korea over the period 1985-2002, regional convergence is evaluated. This study uses panel cointegration tests and a random coefficient model that allows both regional differences and similarities to estimate the Solow growth model. The model also corrects for heteroscedasticity and serial correlation. Evidence is found in favour of regional convergence in Korea, with a rate of convergence of around 8% a year. The results also indicate that the investment rate in physical capital has a significantly positive effect and the population growth has a significantly negative effect on the growth rate of per capita income, holding its initial level constant.

The Impact of Urban Concentration on Economic Growth: An Empirical Investigation for a Sample of Countries

“…According to the convergence hypothesis of neoclassical growth models, a country's per capita growth rate tends to be inversely related to its starting level of income per capita (Barro, 1991). For the panel data setting , and to control for conditional convergence hypothesis, the lagged of in GDP per capita is taken for this variable following works as Loayza (1994), Islam (1995), Kim (2005), and Brulhart and Sbergami (2009); (b) private investment; and (c) government consumption share. To satisfy the restrictions of economic theory, the coefficients of these two variables should be positive and negative respectively.…”

Regional convergence and efficiency in Korea

“…The study uses stochastic frontier production model which allows for technical inefficiency and regional heterogeneity. Evidence is found in favour of regional convergence in Korea, with a lower rate of convergence of around 2% a year than the result of Kim (2005). The main reason is that we allow the inefficiency in production model and find the regional inefficiency.…”

“…Growth convergence implies the shrinkage of u it over time. Kim (2005) finds evidence in favour of regional convergence in Korea, with a rate of convergence of around 8% a year using a random coefficient model. The lower rate of convergence is for the reason that this study uses stochastic frontier production model which allows for regional inefficiency.…”

“…In the recent articles published in Applied Economics Journals, a series of studies have been made on regional efficiency or convergence: Albert (1998), Mcguinness and Sheehan (1998), Gumbau-Albert (2000), Salinas-Jime´nez (2003), Kang (2004), Michelis et al (2004), Alexiadis and Tomkins (2004), Lim and McAleer (2004) and Kim (2005).…”

50 Years of Regional Convergence in Turkey: New Data Set and Analysis for the Period 1960-2010

“…Dobson ve Ramlogan (2002), 1970-1998 döneminde Güney Amerika ülkeleri arasında yakınsama olmadığı bulgusunu elde etmiştir. Kim (2005Kim ( ), 1985Kim ( -2002 döneminde Güney Kore'de bölgeler arasında yakınsama olduğu sonucuna ulaşmıştır. Baddeley, McNay ve Cassen (2006), 1970-1997 döneminde Hindistan'da bölgeler arasında yakınsama olmadığını bulmuştur.…”