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Investigating city economic convergence in KwaZulu‐Natal, South Africa: Integration or isolation
Author(s) -
Coetzee Clive E.,
Kleynhans Ewert P. J.
Publication year - 2018
Publication title -
regional science policy and practice
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.342
H-Index - 8
ISSN - 1757-7802
DOI - 10.1111/rsp3.12140
Subject(s) - convergence (economics) , unit root , productivity , economic geography , sigma , econometrics , diversity (politics) , economics , geography , economic growth , sociology , physics , quantum mechanics , anthropology
Statistics show that economic activity in the province of KwaZulu‐Natal, South Africa, is significantly unequally dispersed over the various regions (44 regions). These regions are also spatially dispersed and it could be argued that such regional diversity and dispersal result in spatial isolation. On the other hand, it seems plausible that there does in fact exist some level of economic integration between the regions. If this is, in fact, the case, the neo‐classical Solow ([Solow, R., 1956]) growth model suggests that the regions should experience some level of convergence. The convergence hypothesis is assessed in this article using regional productivity levels as measured by gross value added per worker, which includes an analysis of the degree of convergence between the regions by testing for beta and sigma convergence. This paper applies cross‐sectional and panel linear regressions to test for beta‐convergence, while sigma‐convergence is assessed through the coefficient of variation and unit root hypothesis of the regional productivity levels. The article finds evidence of beta‐convergence and sigma‐convergence in regional productivity levels across the regions and over the set period.