Analysis of Regional Disparity Among Regencies/Cities and the Correlation with Economic Growth North Sumatera in 2010-2019

Abstract

This research is aimed to find out the level of regional disparity, the effects of government expenditure, natural resources, and the investment toward regional disparity among regencies/cities in North Sumatera Province, and the relationship between the inequality and economic growth of North Sumatera Province in 2010-2019. Using secondary data, the research applies Williamson index analysis technique to measure the development disparity. The panel regression analysis; Common Effect, Fixed Effect and Random Effect; is used to analyze the effects of government expenditure, investment, and natural resources toward regional disparity in North Sumatera in 2010-2019. This research also uses Product Moment Correlation and Regression Curve Estimation to find out the correlation between the disparity and economic growth. The result of the study shows that the level of regional disparity in North Sumatera Province is very high. Government expenditure, natural resources significantly affect the regional disparity, whereas the investment does not significantly affect the disparity. The correlation between the growth economy and regional disparity indicates a very weak negative correlation. Thus, the data cannot be used to explain the correlation between economy growth and development disparity in North Sumatera Province in 2010-2019.