Analysis Of The Effect Of Economic Growth, HDI, Agglomeration And Local Government Spending On Development Inequality Between City Regions In North Sumatra Province

Abstract

The purpose of this study is to analyze the factors that influence development inequality between urban areas in North Sumatra Province, namely Economic Growth, HDI, Agglomeration, and Local Government Expenditure. This study uses panel data analysis method with Fixed Effect Model (FEM) estimation to determine the effect of independent variables on the dependent variable. Development inequality between regions is measured using the concept of Relative GRDP per Capita which was popularized by Jaime Bonet (2006). Based on the results of panel data regression analysis with FEM estimation, it shows that the economic growth variable has a positive and insignificant effect on the development inequality of urban areas in North Sumatra Province. HDI has a positive and significant influence on the development inequality of urban areas in North Sumatra Province. Agglomeration has a negative and significant influence on the development inequality of city regions in North Sumatra Province. Government capital expenditure has a positive and insignificant effect on the development inequality of city regions in North Sumatra Province.