Spatial Correlation Analysis: Geographic and Economic Perspectives

The present study identifies two distinct forms of spatial correlation, namely 'geographic' and 'economic' correlations. To operationalize the former, two weight matrices are utilized, namely the 'geographic adjacency' matrix w1, which is a binary variable indicating whether cities are adjacent or not, and the 'geographical distance' weight matrix w2, which is derived by computing the spherical distance between city centers based on their longitude and latitude. The latter is represented by a matrix of 'economic distance' weights, which are estimated based on the average GDP per capita from 2011 to 2019.