Infrastructure and Economic Growth in East Asia

Infrastructure and Economic Growth in East Asia

This paper examines whether infrastructure investment has contributed to East Asia's economic growth using both a growth accounting framework and cross-country regressions. For most of the variables used, both the growth accounting exercise an...

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Bibliographic Details
Main Authors:	Straub, Stéphane, Vellutini, Charles, Warlters, Michael
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTING ACCOUNTING FRAMEWORK ADB AGGREGATE OUTPUT AGRICULTURE AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE LEVEL BENCHMARK BOTTLENECKS CAPITAL INVESTMENT CENTRAL BANK CONGESTION COUNTRY REGRESSIONS CROSS COUNTRY DECONCENTRATION DEFICITS DEPENDENT VARIABLE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING REGIONS DEVELOPMENT INDICATORS DIMINISHING RETURNS DISPOSABLE INCOME DIVIDENDS DOMESTIC MARKETS DRIVING DYNAMIC PANEL ECONOMIC DEVELOPMENT ECONOMIC GEOGRAPHY ECONOMIC GROWTH ECONOMIC HISTORY ECONOMIC PERFORMANCE ECONOMIC RESEARCH ECONOMICS ECONOMIES OF SCALE EDUCATIONAL ATTAINMENT ELASTICITY EMPIRICAL LITERATURE EMPIRICAL RESULTS ERROR TERM EXOGENOUS VARIABLES EXPLANATORY VARIABLES EXPRESSWAYS EXTERNALITIES EXTERNALITY FACTOR PRICES FINANCIAL CRISIS FINANCIAL DATA FINANCIAL DEVELOPMENT FIXED EFFECTS GDP GDP PER CAPITA GOVERNMENT REGULATION GROSS FIXED CAPITAL FORMATION GROWTH MODELS GROWTH POTENTIAL GROWTH RATE GROWTH RATES GROWTH REGRESSION GROWTH REGRESSIONS GROWTH THEORY HIGH INCOME COUNTRIES HIGHWAY HIGHWAYS HUMAN CAPITAL INCOME DISTRIBUTION INCOME GROUPS INCREASING RETURNS INCREASING RETURNS TO SCALE INDIVIDUAL COUNTRIES INDUSTRIALIZATION INFLATION INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INFRASTRUCTURE POLICIES INFRASTRUCTURES INVENTORY INVESTMENT BANK INVESTMENT CLIMATE LAGGED VALUE LAGGED VALUES LONG-RUN GROWTH LONG-TERM GROWTH LOW-INCOME COUNTRIES MIDDLE EAST MIDDLE INCOME COUNTRIES NEGATIVE EFFECT NEGATIVE IMPACT NEOCLASSICAL GROWTH MODEL NETWORK EXTERNALITIES NORTH AFRICA PACIFIC ISLANDS PANEL REGRESSIONS PER CAPITA GROWTH POLICY ISSUES POLICY RESEARCH POOR COUNTRIES POPULATION DENSITY POSITIVE EFFECTS POVERTY REDUCTION PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT RAIL RAIL NETWORK RAIL ROUTE RAILROAD RAILWAYS REDUCED FORM EQUATION REDUCING POVERTY REGIONAL INEQUALITY RETURN ON INVESTMENT ROAD ROAD INFRASTRUCTURE ROAD NETWORK ROADS ROUTE RURAL POVERTY RURAL ROADS SANITATION SAVINGS SECONDARY SCHOOLING SIGNIFICANT EFFECT STOCKS SUB-SAHARAN AFRICA TELECOMMUNICATIONS TOTAL FACTOR PRODUCTIVITY TOTAL FACTOR PRODUCTIVITY GROWTH TRANSPORT TRINIDAD AND TOBAGO TRUE URBAN AREAS URBANIZATION VEHICLES
Online Access:	http://documents.worldbank.org/curated/en/2008/04/9354731/infrastructure-economic-growth-east-asia http://hdl.handle.net/10986/6520

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Summary:	This paper examines whether infrastructure investment has contributed to East Asia's economic growth using both a growth accounting framework and cross-country regressions. For most of the variables used, both the growth accounting exercise and cross-country regressions fail to find a significant link between infrastructure, productivity and growth. These conclusions contrast strongly with previous studies finding positive and significant effect for all infrastructure variables in the context of a production function study. This leads us to conclude that results from studies using macro-level data should be considered with extreme caution. The Authors suggest that infrastructure investment may have had the primary function of relieving constraints and bottlenecks as they arose, as opposed to directly encouraging growth.