Abstract
The economic growth of the Special Region of Yogyakarta (Daerah Istimewa Yogyakarta or DIY) surrounding areas is naturally originated from agglomeration which was driven by the spatial concentration of economic activities including the aspects of space, community level, city scale, and region. This study aims to determine the development and linkages between production agglomeration and population agglomeration to the economic growth that occurs in DIY. The approach used is the estimation method of fixed effect panel data regression using DIY city/regency administration data in 2005-2016.The results showed that population agglomeration had a significant and positive effect on economic growth, while production agglomeration had no effect on economic growth in model I. Whereas in model II, it is known that production and population agglomeration affected economic growth, labor force negatively affected growth, and unemployment positively and significantly affected economic growth. On the other hand, the poverty level and HDI variables have a negative effect on economic growth. Cities/regencies that have a positive fixed cross effect on economic growth are Sleman, Gunungkidul, and Kulonprogo Regency, while Yogya City and Bantul Regency show a negative sign.
Highlights
City as a spatial embodiment tends to be experiencing changes from time to time
The economic growth of the Special Region of Yogyakarta (Daerah Istimewa Yogyakarta or DIY) surrounding areas is naturally originated from agglomeration which was driven by the spatial concentration of economic activities including the aspects of space, community level, city scale, and region
The influence of agglomeration for economic growth represented by the equation model of economic growth in Yogyakarta can be measured through the variables of production agglomeration and population agglomeration
Summary
City as a spatial embodiment tends to be experiencing changes (physical and non-physical aspects) from time to time. Two main factors play a major role in these changes, namely population factors and policy aspects. Population aspects include broad social conditions, such as political, social, economic, cultural, and technology always changes from time to time. The quantity and quality of its activities always increase with increasing population and changing values. The space as a container for these activities always undergoes continuous changes (Riyadi, 2001). The cities that are already over crowded with the growing population in urban areas with all aspects of the lives--will continuously cause the city to no longer be able to accommodate population activities. The area of the city is administratively limited so that it must look at the surrounding peripheral area as an overflow area for urban development activities
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