Nonlinear Spatial Econometric Modeling of Urbanization and Regional Economic Growth: A Case Study of Bandung Metropolitan Area

Urbanization is a global phenomenon that has become a key driver of regional economic growth. However, rapid economic growth also brings its own challenges. Global urbanization has become one of the main trends shaping the current pattern of world economic growth. The purpose of this study is to analyze the causality relationship and spatial effects of urbanization on the GRDP of Bandung City. This study aims to provide a deeper insight into how the urbanization process affects economic dynamics at the regional level, especially in Bandung City. This study uses a quantitative approach with spatial econometric models, such as Spatial Autoregressive Model (SAR), Spatial Error Model (SEM), or Spatial Durbin Model (SDM), to analyze the influence of independent variables on economic growth in Bandung City. The analysis of Bandung City during 2017-2023 shows that urbanization contributes positively to economic growth, mainly through an increase in GRDP and infrastructure expansion. Economic spillover effects are evident from the impact of growth in one area on the surrounding areas, which is amplified by investment and infrastructure improvements. However, inequality between the north and south emphasizes the need for inclusive policies for equitable development and a fairer distribution of economic benefits.