Do government policies drive economic growth convergence? Evidence from East Java, Indonesia

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 O...

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Autores principales: Achmad Solihin, Wahyu Wisnu Wardana, Erfan Fiddin, Ni Made Sukartini
Formato: article
Lenguaje:EN
Publicado: Taylor & Francis Group 2021
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Acceso en línea:https://doaj.org/article/76e13976cdcc45b89047e94bbd80b234
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spelling oai:doaj.org-article:76e13976cdcc45b89047e94bbd80b2342021-11-26T11:19:50ZDo government policies drive economic growth convergence? Evidence from East Java, Indonesia2332-203910.1080/23322039.2021.1992875https://doaj.org/article/76e13976cdcc45b89047e94bbd80b2342021-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23322039.2021.1992875https://doaj.org/toc/2332-2039While 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.Achmad SolihinWahyu Wisnu WardanaErfan FiddinNi Made SukartiniTaylor & Francis Grouparticleeconomic growthincome inequalityeconomic developmentdevelopment gapgovernment expenditureFinanceHG1-9999Economic theory. DemographyHB1-3840ENCogent Economics & Finance, Vol 9, Iss 1 (2021)
institution DOAJ
collection DOAJ
language EN
topic economic growth
income inequality
economic development
development gap
government expenditure
Finance
HG1-9999
Economic theory. Demography
HB1-3840
spellingShingle economic growth
income inequality
economic development
development gap
government expenditure
Finance
HG1-9999
Economic theory. Demography
HB1-3840
Achmad Solihin
Wahyu Wisnu Wardana
Erfan Fiddin
Ni Made Sukartini
Do government policies drive economic growth convergence? Evidence from East Java, Indonesia
description 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.
format article
author Achmad Solihin
Wahyu Wisnu Wardana
Erfan Fiddin
Ni Made Sukartini
author_facet Achmad Solihin
Wahyu Wisnu Wardana
Erfan Fiddin
Ni Made Sukartini
author_sort Achmad Solihin
title Do government policies drive economic growth convergence? Evidence from East Java, Indonesia
title_short Do government policies drive economic growth convergence? Evidence from East Java, Indonesia
title_full Do government policies drive economic growth convergence? Evidence from East Java, Indonesia
title_fullStr Do government policies drive economic growth convergence? Evidence from East Java, Indonesia
title_full_unstemmed Do government policies drive economic growth convergence? Evidence from East Java, Indonesia
title_sort do government policies drive economic growth convergence? evidence from east java, indonesia
publisher Taylor & Francis Group
publishDate 2021
url https://doaj.org/article/76e13976cdcc45b89047e94bbd80b234
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