earticle

영어

In this paper, we test the absolute and conditional convergence hypothesis by using the data of 16 metropolitan city and provinces since 2000 for confirming convergence of the regional income disparities. The results show that the absolute convergence hypothesis can be applied but the conditional convergence hypothesis cannot be applied with regional income disparities between the capital and non-capital regions. This is because regional disparities of the capital in steady state are different by applying conditional convergence. Because of the productivity divergence in service industries, regional income disparities have widened. Hence the government has to revise the balanced regional development policy to develop regional service industries rather than manufacturing industries for balanced regional development.