Regional Disparity in Economic Development: The Case of Agropolitan Cities in North Sumatera, Indonesia

Abstract

This study aims to analyze: (1) economic development disparity among the Agropolitan cities in North Sumatera Province, Indonesia; (2) factors influencing disparity of income among the Agropolitan cities in North Sumatera Province, Indonesia over the 2012-2016 period. The disparity of economic development among the cities was measured using the Williamson Index, while the panel regression analysis was used to explore factors affecting income disparities among the cities. The study found that (1) the average of Williamson Index in the North Tapanuli City was higher than the other cities, while the lowest index was found for the Simalungun city; (2) Labor productivity, economic agglomeration, capital expenditure and gross fixed capital formation have a significant influence on income disparity Keywords— Williamson's Index; panel data regression; development disparity; income disparity