IDEAS home Printed from https://ideas.repec.org/a/kap/ecopln/v54y2021i4d10.1007_s10644-020-09287-4.html
   My bibliography  Save this article

Impact of infrastructure investment on developed and developing economies

Author

Listed:
  • Xuehui Han

    (Asian Infrastructure Investment Bank)

  • Jiaqi Su

    (Asian Infrastructure Investment Bank)

  • Jang Ping Thia

    (Asian Infrastructure Investment Bank)

Abstract

This paper uses two longitudinal datasets—one with more limited coverage from the organization for economic co-operation and development and another constructed using general government gross fixed capital formation—to test for the relative effects of infrastructure versus non-infrastructure investment on output per worker, between developed and developing economies. The paper presents evidence that increasing infrastructure per worker has a larger relative impact on developing economies. This also implies that the share of gross capital formation devoted to infrastructure should be higher in developing economies.

Suggested Citation

  • Xuehui Han & Jiaqi Su & Jang Ping Thia, 2021. "Impact of infrastructure investment on developed and developing economies," Economic Change and Restructuring, Springer, vol. 54(4), pages 995-1024, November.
    • Handle: RePEc:kap:ecopln:v:54:y:2021:i:4:d:10.1007_s10644-020-09287-4
    DOI: 10.1007/s10644-020-09287-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10644-020-09287-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10644-020-09287-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May.
    2. Philippe Aghion & Mark Schankerman, 1999. "Competition, entry and the social returns to infrastructure in transition economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(1), pages 79-101, March.
    3. Hunt Allcott & Allan Collard-Wexler & Stephen D. O'Connell, 2016. "How Do Electricity Shortages Affect Industry? Evidence from India," American Economic Review, American Economic Association, vol. 106(3), pages 587-624, March.
    4. Guy Michaels, 2008. "The Effect of Trade on the Demand for Skill: Evidence from the Interstate Highway System," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 683-701, November.
    5. Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996. "The composition of public expenditure and economic growth," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 313-344, April.
    6. Laura Alfaro & Sebnem Kalemli-Ozcan & Vadym Volosovych, 2008. "Why Doesn't Capital Flow from Rich to Poor Countries? An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 347-368, May.
    7. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
    8. Ismail, Normaz Wana & Mahyideen, Jamilah Mohd, 2015. "The Impact of Infrastructure on Trade and Economic Growth in Selected Economies in Asia," ADBI Working Papers 553, Asian Development Bank Institute.
    9. Stephen R. Yeaple & Stephen S. Golub, 2007. "International Productivity Differences, Infrastructure, and Comparative Advantage," Review of International Economics, Wiley Blackwell, vol. 15(2), pages 223-242, May.
    10. Fay,Marianne & Lee,Hyoung Il & Mastruzzi,Massimo & Han,Sungmin & Cho,Moonkyoung, 2019. "Hitting the Trillion Mark -- A Look at How Much Countries Are Spending on Infrastructure," Policy Research Working Paper Series 8730, The World Bank.
    11. Aggarwal, Shilpa, 2018. "Do rural roads create pathways out of poverty? Evidence from India," Journal of Development Economics, Elsevier, vol. 133(C), pages 375-395.
    12. John G. Fernald, 1999. "Roads to Prosperity? Assessing the Link between Public Capital and Productivity," American Economic Review, American Economic Association, vol. 89(3), pages 619-638, June.
    13. Julie Rozenberg & Marianne Fay, 2019. "Beyond the Gap," World Bank Publications - Books, The World Bank Group, number 31291.
    14. Holtz-Eakin, Douglas & Schwartz, Amy Ellen, 1995. "Infrastructure in a structural model of economic growth," Regional Science and Urban Economics, Elsevier, vol. 25(2), pages 131-151, April.
    15. Esfahani, Hadi Salehi & Ramirez, Maria Teresa, 2003. "Institutions, infrastructure, and economic growth," Journal of Development Economics, Elsevier, vol. 70(2), pages 443-477, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ghimire, Amogh & Ali, Sajjad & Long, Xingle & Chen, Lili & Sun, Jiayi, 2024. "Effect of Digital Silk Road and innovation heterogeneity on digital economy growth across 29 countries: New evidence from PSM-DID," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    2. Thai-Binh Pham, 2024. "Analysis of the long-run relationship between public capital, economic growth, and (non-)renewable energy consumption: a pooled mean group approach," Economics and Business Letters, Oviedo University Press, vol. 13(3), pages 141-157.
    3. Tianbao Zhou & Zhixin Liu & Yingying Xu, 2024. "Characterizing Public Debt Cycles: Don't Ignore the Impact of Financial Cycles," Papers 2404.17412, arXiv.org.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stephane Straub, 2011. "Infrastructure and Development: A Critical Appraisal of the Macro-level Literature," Journal of Development Studies, Taylor & Francis Journals, vol. 47(5), pages 683-708.
    2. Ward Romp & Jakob De Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(S1), pages 6-52, April.
    3. Nawaz, Saima & Mangla, Inayat Ullah, 2021. "The economic geography of infrastructure in Asia: The role of institutions and regional integration," Research in Transportation Economics, Elsevier, vol. 88(C).
    4. Federici, Andrea, 2018. "Il rapporto tra capitale pubblico e altre variabili macroeconomiche: analisi della letteratura [The relationship between public capital and other macroeconomic variable: a literature review]," MPRA Paper 88515, University Library of Munich, Germany.
    5. Calderon, Cesar & Serven, Luis, 2014. "Infrastructure, growth, and inequality : an overview," Policy Research Working Paper Series 7034, The World Bank.
    6. Thia, Jang Ping & Ong Lopez, Anne, 2023. "Infrastructure quality and trade liberalization," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 134-150.
    7. Timilsina,Govinda R. & Hochman,Gal & Song,Ze, 2020. "Infrastructure, Economic Growth, and Poverty : A Review," Policy Research Working Paper Series 9258, The World Bank.
    8. Kailthya, Subham & Kambhampati, Uma, 2022. "Road to productivity: Effects of roads on total factor productivity in Indian manufacturing," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 174-195.
    9. Mayer, Thierry & Trevien, Corentin, 2017. "The impact of urban public transportation evidence from the Paris region," Journal of Urban Economics, Elsevier, vol. 102(C), pages 1-21.
    10. Angel De la Fuente, 2010. "Infrastructures and productivity: an updated survey," Working Papers 1018, BBVA Bank, Economic Research Department.
    11. Chen, Fanglin & Hao, Xinyue & Chen, Zhongfei, 2021. "Can high-speed rail improve health and alleviate health inequality? Evidence from China," Transport Policy, Elsevier, vol. 114(C), pages 266-279.
    12. He, Guojun & Xie, Yang & Zhang, Bing, 2020. "Expressways, GDP, and the environment: The case of China," Journal of Development Economics, Elsevier, vol. 145(C).
    13. Chatterjee, Santanu & Lebesmuehlbacher, Thomas & Narayanan, Abhinav, 2021. "How productive is public investment? Evidence from formal and informal production in India," Journal of Development Economics, Elsevier, vol. 151(C).
    14. Emmanuel Apergis & Nicholas Apergis, 2019. "“Sakura” has not grown in a day: infrastructure investment and economic growth in Japan under different tax regimes," Empirical Economics, Springer, vol. 57(2), pages 541-567, August.
    15. Kolomak, E., 2011. "Efficiency of Infrastructure Capital in Russia," Journal of the New Economic Association, New Economic Association, issue 10, pages 74-93.
    16. Saidi, Samir & Shahbaz, Muhammad & Akhtar, Pervaiz, 2018. "The long-run relationships between transport energy consumption, transport infrastructure, and economic growth in MENA countries," Transportation Research Part A: Policy and Practice, Elsevier, vol. 111(C), pages 78-95.
    17. Cohen, Daniel & Soto, Marcelo & Causa, Orsetta, 2006. "Lucas and Anti-Lucas Paradoxes," CEPR Discussion Papers 6013, C.E.P.R. Discussion Papers.
    18. Hongyun Han & Shuang Lin, 2019. "Government Size and Regional Capital Flows in China," Sustainability, MDPI, vol. 11(23), pages 1-19, November.
    19. repec:hal:spmain:info:hdl:2441/6d427am2i18m5a5elpijpm1e8l is not listed on IDEAS
    20. Francisco Rodríguez, 2006. "Have Collapses in Infrastructure Spending Led to Cross-Country Divergence in per Capita GDP?," Wesleyan Economics Working Papers 2006-013, Wesleyan University, Department of Economics.
    21. Straub, Stephane, 2008. "Infrastructure and growth in developing countries : recent advances and research challenges," Policy Research Working Paper Series 4460, The World Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:ecopln:v:54:y:2021:i:4:d:10.1007_s10644-020-09287-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.