Abstract
In so far, interesting issues concerning the growth differential at the regional level can be divided into two problems. First, what factors have caused the growth differential? Second, is the regional differential in convergence or divergence with the economic rules of growth differential?
The purpose of this study is to examine convergence of growth differential considering the differing growth patterns of metropolitan areas and local areas in Japan's regional economies. Furthermore, the analysis model used in this paper can investigate the effectiveness of factors causing growth differential and the speed of convergence in growth differential.
This study leads to two notable conclusions. First, I find that the results of testing in the OLS model are not suitable for metropolitan areas. However, this model appeared suitable for local areas. This can be attributed to differing patterns between metropolitan and local areas in regards to regional differentials (β convergence) in income per capita of the employed.
Second, it appears that in local areas having correlatively significant results, the variable of the human capital play a positive role in the growth convergence whereas the variable of the public capital does not. However, when considering effect other than those for product activity, I guess that the role of public capital in the growth would imply higher relative returns than the result suggested in the statistics.
