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Public Investment in Transportation and Communication and Growth:A Dynamic Panel Approach

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  • M E Haque
  • D H Kim

Abstract

This paper investigates the relationship between public investment in transportation and communication and economic growth using traditional instrumental estimation and a mixed fixed and random coefficient approach in the context of a dynamic panel framework. We find that there is a dynamic effect of public investment in transportation and communication on economic growth and its impact is positive. In comparison with earlier studies, our estimtaed coefficients are somewhat lower. However, for the reverse causal relationship proposed by the investment acceleration hypothesis, we find that there is significant heterogeneity across countries and our empirical study does not support the presence of reverse causality.

Suggested Citation

  • M E Haque & D H Kim, 2003. "Public Investment in Transportation and Communication and Growth:A Dynamic Panel Approach," Centre for Growth and Business Cycle Research Discussion Paper Series 31, Economics, The University of Manchester.
    • Handle: RePEc:man:cgbcrp:31
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    Cited by:

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    2. Ibrar Hussain & Zahoor Khan & Muhmmad Rafiq, 2017. "Compositional Changes in Public Expenditure and Economic Growth: Time Series Evidence from Pakistan," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 9(1), pages 1-20, March.
    3. Sanz Labrador, Ismael & Sanz-Sanz, José Félix, 2013. "Política fiscal y crecimiento económico: consideraciones microeconómicas y relaciones macroeconómicas," Macroeconomía del Desarrollo 5367, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    4. Chiara DEL BO, 2009. "Recent advances in public investment, fiscal policy and growth," Departmental Working Papers 2009-25, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    5. Chiara Del Bo & Massimo Florio & Giancarlo Manzi, 2010. "Regional Infrastructure and Convergence: Growth Implications in a Spatial Framework," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 17(3), pages 475-493, September.
    6. Mehmet Aldonat Beyzatlar & Müge Karacal & Ý. Hakan Yetkiner, 2012. "The Granger-Causality between Transportation and GDP: A Panel Data Approach," Working Papers 1203, Izmir University of Economics.
    7. Usman.A & Mobolaji H. I & Kilishi A.A & Yaru M. A & Yakubu, T. A, 2011. "Public Expenditure And Economic Growth In Nigeria," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 1(3), pages 104-113, September.
    8. Bekzod ABDULLAEV & Laszlo KONYA, 2014. "Growth Maximizing Tax Rate for Uzbekistan," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(1), pages 59-72.
    9. Sanwei He & Shan Yu & Lei Wang, 2021. "The nexus of transport infrastructure and economic output in city-level China: a heterogeneous panel causality analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(1), pages 113-135, February.
    10. World Bank, 2010. "Indonesia : Agriculture Public Expenditure Review 2010," World Bank Publications - Reports 13069, The World Bank Group.

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