• Journal of the Korean Regional Science Association
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• v.32 no.3
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• pp.45-62
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• 2016

The main purpose of this study is to investigate whether the gap of fiscal self-sufficiency rates of 16 provincial governments in Korea has been narrowed and to suggest some remedies based on the empirical results. The panel data set from 1998 to 2013 is used and pooled OLS and system GMM regression techniques are employed. The fiscal self-sufficiency rates show downward trend and ${\beta}-convergence$ exists in absolute and conditional convergence analysis. The speed of conditional convergence anlysis is proved to be faster than that of absolute analysis. Both metropolitan cities and prefectures show convergence of fiscal self-sufficiency rates. We have found out that in the case of metropolitan cities, the proportion of workers in the tertiary industry has positive effect on fiscal self-sufficiency rates and in the case of prefectures number of cars per capita has positive effect. And in both cases increase in old population has negative effect.