TY - JOUR
T1 - Do government policies drive economic growth convergence? Evidence from East Java, Indonesia
AU - Solihin, Achmad
AU - Wardana, Wahyu Wisnu
AU - Fiddin, Erfan
AU - Sukartini, Ni Made
N1 - Publisher Copyright:
© 2021 The Author(s). This open access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license.
PY - 2021
Y1 - 2021
N2 - While Indonesia has been experiencing relatively considerable and stable economic growth in the last decades, the country is prone to income disparity across regions due to uneven distribution of population, natural resources and the persistent impacts of centralized development imposed by the New Order regime. This study examines the economic growth convergence in East Java, Indonesia, from 2010 to 2019 and explores the influence of government expenditure on education, health, and capital sector on the economic growth convergence. By considering spatial dependence across regions, the result shows no strong evidence of regional income convergence in East Java. Also, this research claims the presence of spillover effect of government expenditure on education and capital sector on regional income growth. Notably, higher government expenditure of the education sector in one region could stimulate higher economic growth of its neighboring regions. Conversely, higher government expenditure on the capital sector in one region may lower the economic growth of its surrounding regions.
AB - While Indonesia has been experiencing relatively considerable and stable economic growth in the last decades, the country is prone to income disparity across regions due to uneven distribution of population, natural resources and the persistent impacts of centralized development imposed by the New Order regime. This study examines the economic growth convergence in East Java, Indonesia, from 2010 to 2019 and explores the influence of government expenditure on education, health, and capital sector on the economic growth convergence. By considering spatial dependence across regions, the result shows no strong evidence of regional income convergence in East Java. Also, this research claims the presence of spillover effect of government expenditure on education and capital sector on regional income growth. Notably, higher government expenditure of the education sector in one region could stimulate higher economic growth of its neighboring regions. Conversely, higher government expenditure on the capital sector in one region may lower the economic growth of its surrounding regions.
KW - Economic growth
KW - Government expenditure
KW - development gap
KW - economic development
KW - income inequality
UR - http://www.scopus.com/inward/record.url?scp=85119606640&partnerID=8YFLogxK
U2 - 10.1080/23322039.2021.1992875
DO - 10.1080/23322039.2021.1992875
M3 - Article
AN - SCOPUS:85119606640
SN - 2332-2039
VL - 9
JO - Cogent Economics and Finance
JF - Cogent Economics and Finance
IS - 1
M1 - 1992875
ER -