| Summary: | The aim of this study is to analyze the main factors of economic growth and convergence in the District and the City on the Java island, 2004-2012 taking into account of the spatial aspect. This study uses Geographic Information Systems (GIS), spatial autocorrelation and spatial econometrics as methods of analysis. This study uses a dynamic panel analysis framework in which the value of the lag dependent variable to be a part of the model. Spatial econometric analysis in this study using the system GMM because the emergence of endogeneity problems in the growth model and in particular on the dynamic panel model. Human capital are defined as education (the average length of school) and health (life expectancy) became one of the main factors affecting economic growth, besides the effects shown abundance of the interaction between the regions so that the mobilization of factors of production occurs.
The results using the Geographic Information System, Global and Local Moran Moran'I Statistics show that in Java proved to exist in the cluster pattern of income levels, education, health and population density. The existence of sigma convergence shows the sigma convergence in counties and cities in Java. Absolute and conditional beta convergence in Java with non-spatial and spatial approach using system GMM proves the absence of convergence in the District and the City on the island of Java. Spillover effect forming factors of economic growth, especially human capital to economic growth in Java is not proven in this empirical research. Cluster pattern which is an early indication of the analysis of the spillover effect was not able to be proven empirically supports of the existence clustering economic activity on the Java island. The existence of an abundance of the factors that occur in a spatial model of this study proved to exist in the population abundance variables.
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