Transport Infrastructure and Economic Growth: Spatial Effects

• Main Author: Artyom Gennadyevich Isaev
• Format: Article
• Language: Russian
• Published: Economic Research Institute of the Far East Branch of the Russian Academy of Sciences 2015-09-01
• Series: Prostranstvennaâ Èkonomika
• Subjects: regional growth; transport infrastructure; spatial externalities; Russian regions; generalized method of moments
• Online Access: http://spatial-economics.com/eng/images/spatial-econimics/3_2015/SE.2015.3.057-073.Isaev.pdf

The author specifies an empirical framework of neoclassical growth model in order to examine impact of transport infrastructure on economic growth in Russian regions during period of 2000-2013. Two different effects of infrastructure are considered. First, infrastructure is viewed as part of region’s own production function. Second, infrastructure generates spillover effect on adjacent regions’ economic performance which can be negative or positive. Results imply that road infrastructure has a positive influence on regional growth, but sign of railroad infrastructure coefficient depends on whether or not congestion effect is considered. Negative spillover effect is shown to exist in the case of road infrastructure. This apparently means that rapid road infrastructure development in some regions moves mobile factors of production away from adjacent regions retarding their economic development. The spillover effect of railroad infrastructure is significant and negative again only if congestion effect is considered. The results of estimation for the Far East and Baikal Regions separately demonstrate no significant effect of both types of infrastructure for economic performance and negative spillover effect of road infrastructure