Effects of Road Infrastructure on Employment, Productivity and Growth: An Empirical Analysis at Country Level. (June 2019)

• Record Type: Journal Article
• Authors: Laborda, Leopoldo; Sotelsek, Daniel
• Is Part Of: Journal of infrastructure development. Volume 11:Number 1/2(2019)
• Page Start: 81
• Page End: 120
• Publication Date: 2019-06
• Subjects: Transport infrastructure -- employment -- productivity -- growth -- panel data -- dynamic models; Infrastructure (Economics) -- Periodicals; City planning -- Periodicals; Economic development -- Periodicals; 363.05
• DOI: 10.1177/0974930619879573
• Languages: English
• ISSNs: 0974-9306

Abstract

This article estimates the effect of transport infrastructure at country level, on employment, productivity (total factor productivity (TFP), and their components technical efficiency–pure and the scale—and technological change) and economic growth, using a dynamic panel approach. We focus on two broad categories of transport infrastructure: (1) road density and (2) road paved. Using dynamic panel GMM system estimation, we find positive effects of road density and road paved on total factor productivity (TFP) in countries with middle low and low income (using parametric and non-parametric estimations). On the other hand, and taking into account the Deng's hypothesis of a nonlinearity relationship between transport infrastructure and economic growth (Deng, 2013, Transport Reviews 33(6): 686–99), we found empirical evidence about a Kuznets curve when we consider the percentage of roads paved. In countries with middle low and low income, we also found a Kuznets curve between road density and unemployment. JEL Classification: H54, R42, O47, O4, C23