Connective Financing - Chinese Infrastructure Projects and the Diffusion of Economic Activity in Developing Countries
54 Pages Posted: 10 Jun 2020
Date Written: 2020
This paper studies the causal effect of transport infrastructure on the spatial distribution of economic activity within subnational regions in a large number of developing countries. To do so, we introduce a new global dataset of geolocated Chinese development finance projects over the period from 2000 to 2014 and combine it with measures of spatial concentration based on remotely-sensed data. We find that Chinese-financed transportation projects reduce spatial concentration within regions. Transport projects decentralize economic activity particularly strongly in regions that are more urbanized, located closer to a city, and less developed.
JEL Classification: F150, F350, R110, R120, P330, O180, O190
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