The Relationship of Specialization vs Diversification on Quality of Economic Growth in Sumatera Island, Indonesia
Abstract
The success of sustainable economic development is seen to be enhanced by economic growth. Numerous studies have looked at the connection between economic growth and development, but the findings are still contradictory. The purpose of this research is to investigate the elements of agglomeration externalities that contribute to quality of economic growth. The agglomeration externalities namely specialization versus diversification. A mathematical quantitative approach was employed in this study using Marshallian and Jacobian Index while quality of growth measured by 6 dimensions. Quadrant method applied to analyze the relationship between the variables. The empirical evidence in Sumatera Islands showed that specialization policy has a higher positive impact to quality of economic growth than those from diversification policy. Thus, the implication in this study suggested that local government would be better off by focusing on certain sector rather than diversifying production.
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Ge, T., Li, C., Li, J., & Hao, X. (2023). Does neighboring green development benefit or suffer from local economic growth targets ? Evidence from China. 120(9).
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Mohanty, P. K., & Mishra, A. K. (2014). Cities and agglomeration externalities: Lessons for urban public policy in Asian countries. Environment and Urbanization ASIA, 5(2), 235–251.
Peng, D., Li, R., Shen, C., & Wong, Z. (2022). Industrial agglomeration, urban characteristics, and economic growth quality: The case of knowledge-intensive business services. International Review of Economics and Finance, 81(April), 18–28.
Peng, J., Tian, L., Liu, Y., Zhao, M., Hu, Y., & Wu, J. (2017). Ecosystem services response to urbanization in metropolitan areas: Thresholds identification. Science of the Total Environment.
Pradhan, R. P., Arvin, M. B., & Nair, M. (2021). Urbanization, transportation infrastructure, ICT, and economic growth: A temporal causal analysis. Cities, 115(April).
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Sharma, S., Nahid, S., Sharma, M., Sannigrahi, S., Anees, M. M., Sharma, R., Shekhar, R., Basu, A. S., Pilla, F., Basu, B., & Joshi, P. K. (2020). A long-term and comprehensive assessment of urbanization-induced impacts on ecosystem services in the capital city of India. City and Environment Interactions.
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Tan, R., Pan, L., Xu, M., & He, X. (2022). Transportation infrastructure, economic agglomeration and non-linearities of green total factor productivity growth in China: Evidence from partially linear functional coefficient model. In Transport Policy (Vol. 129, pp. 1–13).
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Van der Panne, G. (2004). Agglomeration externalities: Marshall versus jacobs. Journal of evolutionary economics, 14, 593-604.
Waheed, R., Sarwar, S., & Alsaggaf, M. I. (2023). Relevance of energy, green and blue factors to achieve sustainable economic growth: Empirical study of Saudi Arabia. Technological Forecasting and Social Change, 187(October 2022).
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Published
2024-03-01
How to Cite
JAMAL, Abd. et al.
The Relationship of Specialization vs Diversification on Quality of Economic Growth in Sumatera Island, Indonesia.
International Journal of Advanced Research in Economics and Finance, [S.l.], v. 6, n. 1, p. 78-85, mar. 2024.
ISSN 2682-812X.
Available at: <https://myjms.mohe.gov.my/index.php/ijaref/article/view/25889>. Date accessed: 14 june 2025.
Section
English Section
