IDEAS home Printed from https://ideas.repec.org/p/ris/adbiwp/1274.html
   My bibliography  Save this paper

Regional Economic Impacts of Trans-Caspian Infrastructure Improvement: Implications for the Post-COVID-19 Era

Author

Listed:
  • Li, Xinmeng

    (Asian Development Bank Institute)

  • Wang, Kailai

    (Asian Development Bank Institute)

  • Chen, Zhenhua

    (Asian Development Bank Institute)

Abstract

With the implementation of the Belt and Road Initiative (BRI) in the People’s Republic of China (PRC), the Trans-Caspian International Transport Route (TITR) has received increasing attention. The corridor connects the PRC and Europe via Central Asian countries. Hence, it plays an important role in facilitating international trade through its transportation infrastructure network systems. As the corridor is opening up substantial economic opportunities for transit countries, it is becoming essential to have a proper understanding of the economic impact of potential transportation infrastructure investment on these countries along the TITR corridor. We conduct a regional economic impact assessment of transportation infrastructure investment to fill this research gap, using a computable general equilibrium analysis. To capture the uncertainty of infrastructure investment given the influence of COVID-19, we evaluated different impacts of the shocks, such as different modes of freight transportation (including rail, road, sea, and air), types of trade (exporting and importing), and levels of investor confidence. The results show that infrastructure investment has heterogeneous multiplier effects on the regional economy (due to the differences in infrastructure quality and country endowment). The impacts of infrastructure investment primarily result from the promotion of exports, and the impacts vary substantially by mode. Overall, we suggest that, although TITR countries are facing investment uncertainty due to the influence of COVID-19, strengthening infrastructure investment can be a useful tool to stimulate the economy while reducing the negative impact of the epidemic.

Suggested Citation

  • Li, Xinmeng & Wang, Kailai & Chen, Zhenhua, 2021. "Regional Economic Impacts of Trans-Caspian Infrastructure Improvement: Implications for the Post-COVID-19 Era," ADBI Working Papers 1274, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:1274
    as

    Download full text from publisher

    File URL: https://www.adb.org/sites/default/files/publication/719701/adbi-wp1274.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. de Soyres, François & Mulabdic, Alen & Ruta, Michele, 2020. "Common transport infrastructure: A quantitative model and estimates from the Belt and Road Initiative," Journal of Development Economics, Elsevier, vol. 143(C).
    2. Mukhopadhyay Kakali & Paul J. Thomassin, 2010. "Economic and Environmental Impact of Free Trade in East and South East Asia," Springer Books, Springer, number 978-90-481-3507-3, June.
    3. Yang Chen & Nimesh Salike & Fushu Luan & Ming He, 2016. "Heterogeneous effects of inter- and intra-city transportation infrastructure on economic growth: Evidence from Chinese cities," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 9(3), pages 571-587.
    4. Zhenhua Chen & Kingsley Haynes, 2015. "Multilevel assessment of public transportation infrastructure: a spatial econometric computable general equilibrium approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 663-685, May.
    5. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
    6. Shi, Kaifang & Yu, Bailang & Huang, Chang & Wu, Jianping & Sun, Xiufeng, 2018. "Exploring spatiotemporal patterns of electric power consumption in countries along the Belt and Road," Energy, Elsevier, vol. 150(C), pages 847-859.
    7. Zhenhua Chen & Xinmeng Li, 2021. "Economic impact of transportation infrastructure investment under the Belt and Road Initiative," Asia Europe Journal, Springer, vol. 19(1), pages 131-159, December.
    8. Bilgin, Mert, 2009. "Geopolitics of European natural gas demand: Supplies from Russia, Caspian and the Middle East," Energy Policy, Elsevier, vol. 37(11), pages 4482-4492, November.
    9. Dan Wei & Zhenhua Chen & Adam Rose, 2019. "Estimating economic impacts of the US-South Korea free trade agreement," Economic Systems Research, Taylor & Francis Journals, vol. 31(3), pages 305-323, July.
    10. Iza Gigauri & Nino Damenia, 2019. "Economic Expectations of the Belt and Road Initiative for the South Caucasus, with Emphasis on Georgia," Business and Economic Research, Macrothink Institute, vol. 9(1), pages 173-199, March.
    11. Taotao Deng & Shuai Shao & Lili Yang & Xueliang Zhang, 2014. "Has the transport-led economic growth effect reached a peak in China? A panel threshold regression approach," Transportation, Springer, vol. 41(3), pages 567-587, May.
    12. Junjie Hong & Zhaofang Chu & Qiang Wang, 2011. "Transport infrastructure and regional economic growth: evidence from China," Transportation, Springer, vol. 38(5), pages 737-752, September.
    13. Joseph Francois & Miriam Manchin & Annette Pelkmans-Balaoing, 2009. "Regional Integration in Asia: The Role of Infrastructure," Palgrave Macmillan Books, in: Joseph Francois & Pradumna B. Rana & Ganeshan Wignaraja (ed.), Pan-Asian Integration, chapter 7, pages 439-485, Palgrave Macmillan.
    14. Rose, Adam, 1995. "Input-output economics and computable general equilibrium models," Structural Change and Economic Dynamics, Elsevier, vol. 6(3), pages 295-304, August.
    Full references (including those not matched with items on IDEAS)

    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. Azhgaliyeva, Dina & Kalyuzhnova, Yelena (ed.), 2021. "Unlocking Transport Connectivity in the Trans-Caspian Corridor," ADBI Books, Asian Development Bank Institute, number 22, Décembre.
    2. Zhenhua Chen & Xinmeng Li, 2021. "Economic impact of transportation infrastructure investment under the Belt and Road Initiative," Asia Europe Journal, Springer, vol. 19(1), pages 131-159, December.
    3. Adam Rose & Zhenhua Chen & Dan Wei, 2023. "The economic impacts of Russia–Ukraine War export disruptions of grain commodities," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(2), pages 645-665, June.
    4. Hirokazu Akahori & Daisuke Sawauchi & Yasutaka Yamamoto, 2017. "Measuring the Changes of Greenhouse Gas Emissions Caused by the Trans-Pacific Partnership," Sustainability, MDPI, vol. 9(5), pages 1-12, April.
    5. Zhang, Yijia & Cheng, Lu, 2023. "The role of transport infrastructure in economic growth: Empirical evidence in the UK," Transport Policy, Elsevier, vol. 133(C), pages 223-233.
    6. Tong, Tingting & Yu, T. Edward, 2018. "Transportation and economic growth in China: A heterogeneous panel cointegration and causality analysis," Journal of Transport Geography, Elsevier, vol. 73(C), pages 120-130.
    7. Elena Cigu & Daniela Tatiana Agheorghiesei & Anca Florentina Gavriluță (Vatamanu) & Elena Toader, 2018. "Transport Infrastructure Development, Public Performance and Long-Run Economic Growth: A Case Study for the Eu-28 Countries," Sustainability, MDPI, vol. 11(1), pages 1-22, December.
    8. Mehmet Aldonat Beyzatlar & Hakan Yetkiner, 2017. "Convergence in transportation measures across the EU-15," Transportation, Springer, vol. 44(5), pages 927-940, September.
    9. Ren, Yi & Tian, Yuan & Xiao, Xue, 2022. "Spatial effects of transportation infrastructure on the development of urban agglomeration integration: Evidence from the Yangtze River Economic Belt," Journal of Transport Geography, Elsevier, vol. 104(C).
    10. Linda Calabrese & Rhys Jenkins & Lorena Lombardozzi, 2024. "The Belt and Road Initiative and Dynamics of Structural Transformation," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(3), pages 515-547, June.
    11. Chen Shen, 2023. "The Impact of Infrastructure Development on China–ASEAN Trade-Evidence from ASEAN," Sustainability, MDPI, vol. 15(4), pages 1-11, February.
    12. Tewodros Negash Kahsay & Onno Kuik & Roy Brouwer & Pieter Zaag, 2018. "The Transboundary Impacts of Trade Liberalization and Climate Change on the Nile Basin Economies and Water Resource Availability," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 32(3), pages 935-947, February.
    13. Gabriel Mhonyera & Daniel Francois Meyer, 2023. "The Impact of AfCFTA on Welfare and Trade: Nigeria and South Africa in Light of Core Export Competences," Sustainability, MDPI, vol. 15(6), pages 1-16, March.
    14. Ştefan Cristian Gherghina & Mihaela Onofrei & Georgeta Vintilă & Daniel Ştefan Armeanu, 2018. "Empirical Evidence from EU-28 Countries on Resilient Transport Infrastructure Systems and Sustainable Economic Growth," Sustainability, MDPI, vol. 10(8), pages 1-34, August.
    15. Pradhan, Rudra P., 2019. "Investigating the causal relationship between transportation infrastructure, financial penetration and economic growth in G-20 countries," Research in Transportation Economics, Elsevier, vol. 78(C).
    16. Henglong Zhang & Yitong Jiang & Conglei Hou, 2024. "How Does the “Belt and Road” Initiative Affect Debt Sustainability?," Sustainability, MDPI, vol. 16(23), pages 1-24, November.
    17. Anyu Chen & Yueran Li & Kunhui Ye & Tianyi Nie & Rui Liu, 2021. "Does Transport Infrastructure Inequality Matter for Economic Growth? Evidence from China," Land, MDPI, vol. 10(8), pages 1-21, August.
    18. Wolfgang Britz & Roberto Roson, 2018. "Exploring Long Run Structural Change with a Dynamic General Equilibrium Model," Working Papers 2018: 12, Department of Economics, University of Venice "Ca' Foscari".
    19. Simon J.Evenett & Mia Mikic & Ravi Ratnayake (ed.), 2011. "Trade-led growth: A sound strategy for Asia," ARTNeT Books and Research Reports, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), number brr10.
    20. Ianchovichina, Elena, 2004. "Trade policy analysis in the presence of duty drawbacks," Journal of Policy Modeling, Elsevier, vol. 26(3), pages 353-371, April.

    More about this item

    Keywords

    Trans-Caspian International Transport Route; transportation infrastructure; trade cost; computable general equilibrium;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:ris:adbiwp:1274. 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: ADB Institute (email available below). General contact details of provider: https://edirc.repec.org/data/adbinjp.html .

    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.