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Road Transport Infrastructure and Economic Growth in India

Author

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  • Shruti Tripathi

    (Research Scholar, Indira Gandhi Institute of Development Research, Mumbai, shruti@igidr.ac.in)

  • Vikash Gautam

    (Research Scholar, Indira Gandhi Institute of Development Research, Mumbai, vikash@igidr.ac.in)

Abstract

Creation of road transport infrastructure, through its direct and indirect effects, has a bearing on sustainability of growth and overall development of a country. It provides knowledge spillovers resulting from the whole agglomerated area via network dynamic externalities. The models based on cost or production function that incorporate infrastructure but simply assume a positive effect are no longer satisfactory to take to the data, because they ignore any feedback effect. In this article, therefore, we have twin objectives: first, we examine whether road transport infrastructure has a long-run equilibrium relationship with the macroeconomic variables such as output, employment and gross private capital formation or not. Second, we use vector autoregression (VAR) approach to analyse the impact of road transport infrastructure on macroeconomic variables. The elasticities that are estimated in the VAR model differ from the production function elasticities, as they incorporate feedback effect between the variables in the model, as opposed to the ‘ceteris paribus’ elasticities which are estimated in production function studies.

Suggested Citation

  • Shruti Tripathi & Vikash Gautam, 2010. "Road Transport Infrastructure and Economic Growth in India," Journal of Infrastructure Development, India Development Foundation, vol. 2(2), pages 135-151, December.
    • Handle: RePEc:sae:jouinf:v:2:y:2010:i:2:p:135-151
    DOI: 10.1177/097493061100200204
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    References listed on IDEAS

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    3. Batool, Irem & Goldmann, Kathrin, 2021. "The role of public and private transport infrastructure capital in economic growth. Evidence from Pakistan," Research in Transportation Economics, Elsevier, vol. 88(C).
    4. Maparu, Tuhin Subhra & Mazumder, Tarak Nath, 2021. "Investigating causality between transport infrastructure and urbanization: A state-level study of India (1991–2011)," Transport Policy, Elsevier, vol. 113(C), pages 46-55.
    5. Muvawala, Joseph & Sebukeera, Hennery & Ssebulime, Kurayish, 2021. "Socio-economic impacts of transport infrastructure investment in Uganda: Insight from frontloading expenditure on Uganda's urban roads and highways," Research in Transportation Economics, Elsevier, vol. 88(C).
    6. Baiqing Sun & Ramadhan Kauzen, 2023. "The Impact of Port Infrastructure and Economic Growth in Tanzania: Adopting a Structural Equation Modeling Approach," SAGE Open, , vol. 13(1), pages 21582440221, January.
    7. Maparu, Tuhin Subhra & Mazumder, Tarak Nath, 2017. "Transport infrastructure, economic development and urbanization in India (1990–2011): Is there any causal relationship?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 100(C), pages 319-336.
    8. Saeed Solaymani & Saeed Sharafi, 2021. "A Comparative Study between Government Support and Energy Efficiency in Malaysian Transport," Sustainability, MDPI, vol. 13(11), pages 1-15, May.
    9. Barzin, Samira & D'Costa, Sabine & Graham, Daniel J., 2018. "A pseudo – panel approach to estimating dynamic effects of road infrastructure on firm performance in a developing country context," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 20-34.
    10. Bayissa Badada & G. Delina & Sun Baiqing & Ramaswamy Krishnaraj, 2023. "Economic Impact of Transport Infrastructure in Ethiopia: The Role of Foreign Direct Investment," SAGE Open, , vol. 13(1), pages 21582440231, March.
    11. Samira Barzin & Sabine D'Costa & Daniel Graham, 2016. "A Pseudo-Panel Approach to Estimating Dynamic Effects of Road Infrastructure Provision on Firm Performance in a Developing Country Context," Working Papers 69, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.

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    More about this item

    Keywords

    JEL Classification: B41; JEL Classification: C01; JEL Classification: C22; JEL Classification: R42; Network dynamic externalities; cost function; production function; feedback effect; VAR; output; employment; gross private capital formation; elasticity;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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