Is Korea’s Sustainable Growth Threatened by Regional Disparities? Evidence from Convergence Analysis of Income and Consumption

This paper examines regional economic development in the Republic of Korea, highlighting its relevance for sustainable growth. Korean regionalism, often framed as disparities between government-favored areas—Seoul and the South-East—and allegedly disadvantaged regions, particularly the South-Western Jeolla provinces, has long shaped public perception and policy debates. Using a panel dataset of sixteen regions from 1998 to 2022, we analyze convergence in per-capita GDP and consumption levels with the time-factor decomposition framework. Our findings reject overall economic convergence, revealing persistent geographical disparities. Yet, contrary to conventional narratives, the South-East and South-West provinces form convergence clubs together, and Seoul aligns with historically disadvantaged South Jeolla in per-capita GDP. Other convergence clubs indicate an urban–rural economic divide. These results suggest that perceptions of regional favoritism may not reflect actual economic outcomes. From a sustainability perspective, the study underscores the need for evidence-based regional development policies: promoting sustainable growth requires attention to empirically observed economic patterns rather than historical assumptions or perceived favoritism.