On the Road: Access to Transportation Infrastructure and Economic Growth in China
Abhijit V. Banerjee
Massachusetts Institute of Technology (MIT) - Department of Economics
Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); Bureau for Research and Economic Analysis of Development (BREAD)
Yale University - Department of Economics
February 29, 2012
MIT Department of Economics Working Paper No. 12-06
This paper estimates the effect of access to transportation networks on regional economic outcomes in China over a twenty-period of rapid income growth. It addresses the problem of the endogenous placement of networks by exploiting the fact that these networks tend to connect historical cities. Our results show that proximity to transportation networks have a moderate positive causal effect on per capita GDP levels across sectors, but no effect on per capita GDP growth. We provide a simple theoretical framework with empirically testable predictions to interpret our results. We argue that our results are consistent with factor mobility playing an important role in determining the economic benefits of infrastructure development.
Number of Pages in PDF File: 51
Keywords: infrastructure, growth, inequality, firms
JEL Classification: D2, O4 , R4working papers series
Date posted: March 9, 2012
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