Assessing Small Industrial Agglomeration and Economic Growth in South Sumatra

Abstract

—The relationship between small industrial agglomeration with economic growth is urgent to do in-depth empirical study. The determination of South Sumatra as a center for the development of small and medium industries indicates that economic growth is the effect of small industrial agglomeration. To determine the relationship between the small industrial agglomeration and economic growth used secondary data, such as South Sumatra economic growth data with the scope of the nine districts/ cities. Small industrial agglomeration measured using the Balassa-Hoover index. Consideration of using the nine districts/ cities because that area has diverse industry types. The analysis technique used a simple linear regression with panel data. The result shows that there is a positive relation between small industrial agglomeration and economic growth in South Sumatra, although still relatively weak.