Spatial convergence patterns in the presence of information technology

Two issues drive this research. The first is the lack of understanding on how differences of spatial per capita incomes evolve during rapid technological changes, such as an emergence of information technology (IT). The previous long-term convergence pattern appears to change in the entitled "Information Age," because studies report nonconvergence or divergence evidence recently. The second is the limited understanding of how spatial income distributions evolve for substrate units, especially in the presence of IT. The convergence literature predominately investigates large geographical aggregations.; This research investigates whether the convergence change is relevant to IT, and whether convergence patterns vary at different spatial scales. The assumptions are that, during the "Information Age," convergence speeds become slower or even negative initially, but get faster later. For a relatively long span, convergence trend prevails. Convergence is also faster if it is examined with larger geographical units. Moreover, long-time convergence occurs in both the rich-poor region and the center periphery directions.; Regarding the rich-poor-region direction, beta convergence tests for states and counties within states support these assumptions; beta tests for counties throughout the U.S. do not. All sigma convergence tests support the assumptions. Tests demonstrate faster convergence at the state level than at the county level. Probably as a result, spatial income inequalities at the county level are more severe. Observations of data indicate long-time convergence between centers and the suburbs, but two-tail-t-tests do not show any convergence or divergence. Also, IT impacts seem to be stronger on the pair of center and the outer suburbs, and appear to lag behind in smaller places for the center-periphery convergence.; The empirical evidence supports the long-range convergence argument by the neoclassical theory assuming exogenous development of technology and declining returns to capital. No long-time evidence has supported the new growth theory assuming endogenous development of technology. However, transitory non-convergence or divergence, can occur when there are increasing returns initially during significant technological changes. An explanation for faster convergence at a higher spatial level can be across large distance technological diffusions brought by IT firms' to other state or to other nation (global or off-shoring) relocation patterns.