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The nexus between infrastructure development, economic growth, foreign direct investment, and trade: an empirical investigation from China’s regional trade data

Author

Listed:
  • Yasir Khan

    (Anhui Polytechnic Univeristy)

  • Taimoor Hassan

    (Nanjing Univeristy of Science and Tehcnology)

  • Cai Shukai

    (Anhui Polytechnic Univeristy)

  • Hana Oubaih

    (Anhui Polytechnic Univeristy)

  • Muhammad Nisar Khan

    (Bacha Khan University Charassadda)

  • Jawed Kootwal

    (Southeast University)

  • Ubaid Ur Rahman Rehimi

    (Southeast University)

Abstract

The current study investigates the nexus between infrastructure development, economic growth, foreign direct investments, and trade for China’s regional trade data. It investigates to what extent infrastructure development affects regional access to international markets. Based on the Ordinary Least Square (OLS) and GMM model, this study quantifies the importance of infrastructure development using panel data on international trade of Chinese provinces and the change of infrastructure capacity, mainly the rail and roads, as well as connecting them to the international gateway of the country. Furthermore, this study explores the impact of the infrastructure quality (i.e., road, airport, and port) and telecommunication on the development of the Chinese regions. Moreover, the robustness of the results is investigated by estimating a Fixed Effect model where bilateral indexes of infrastructure quality are included. As a result, there are three main findings in the study. First, infrastructure quality is a crucial determinant of trade performance. Second, road and railway efficiency may have a substantial impact on trade among all indicators of infrastructure. Third, punctuality and access to telecommunication are relatively essential for export trade.

Suggested Citation

  • Yasir Khan & Taimoor Hassan & Cai Shukai & Hana Oubaih & Muhammad Nisar Khan & Jawed Kootwal & Ubaid Ur Rahman Rehimi, 2022. "The nexus between infrastructure development, economic growth, foreign direct investment, and trade: an empirical investigation from China’s regional trade data," SN Business & Economics, Springer, vol. 2(7), pages 1-31, July.
    • Handle: RePEc:spr:snbeco:v:2:y:2022:i:7:d:10.1007_s43546-022-00255-w
    DOI: 10.1007/s43546-022-00255-w
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