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Transportation (2011) 38:737752 DOI 10.1007/s11116-011-9349-6
Junjie Hong Zhaofang Chu Qiang Wang
Published online: 2 June 2011 Springer Science+Business Media, LLC. 2011
Abstract This article develops a multi-dimensions measurement of transport infrastructure and examines the linkage between transport infrastructure and regional economic growth. A panel data model is estimated using data from a sample of 31 Chinese provinces from 1998 to 2007. The results provide strong evidence that transport infrastructure plays an important role in economic growth. Both land transport and water transport infrastructure have strong and signicant impacts, while the contribution of airway transport infrastructure is weak. Furthermore, land transport infrastructure contributes more to economic growth in locations with poor land transport infrastructure, while the investment in water transport infrastructure contribute positively to economic growth only after the investment scale exceeds a threshold level. These results are robust to a variety of alternative methods, the exclusion of possible outliers, and consideration of endogeneity. A retrospective analysis shows that uneven distribution of transport infrastructure is an important reason behind economic disparities across Chinese regions.
Keywords Transport infrastructure Economic growth Regional disparity China
Introduction
Transport infrastructure leads to economic growth through several ways. First, investing in infrastructure itself increases demand for goods and services. Second, transport infrastructure improvement reduces travel time, and passenger and freight transporters gain directly from time and cost saving (Gunasekera et al. 2008). The time savings induced by improvement of transport infrastructure can yield economic consequences through making producers access to distant markets and draw inputs from a larger area, and hence stimulate local production. In addition, highway infrastructure investment can generate benets by lowering rms inventories (Shirley and Winston 2004). Third, better infrastructure attracts
J. Hong (&) Z. Chu Q. Wang
School of International Trade and Economics, University of International Business and Economics, Beijing 100029, Chinae-mail: [email protected]
Transport infrastructure and regional economic growth: evidence from China
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foreign direct investment (Hong 2007), which is widely regarded as an important engine of economic growth in China. Lastly, lower transport and trade cost can accelerate industrial agglomeration (Baldwin and Forslid 2000; Krugman 1991), and the concentration of economic activities increases labor productivity (Ciccone and Hall 1996). Banister and Berechman (2000) depict a general framework that describes the relationship between the...