Causality Between Public Investment in Transport and Communication and Economic Growth

International Scientific Days 2018. Towards Productive, Sustainable and Resilient Global Agriculture and Food Systems: Proceedings, 2018

Provision and maintenance of adequate infrastructure facilities are necessary if there is need to achieve and sustain rapid economic growth. The availability of infrastructure like transport is vital for accelerated development and modernization of a country. Transport infrastructure in particular, is vital to the prosperity of regions. The contribution of our study refers to the investigation the relationship and causality between economic growth, transport infrastructure, investment in transport infrastructure, as in transition countries. To achieve this aim, we proposed the growth model.We use annual data of 25 transition countries (see Appendix 1) for the time period 1990-2013.The findings from GMM reveal that there is bidirectional causal relationship between repressors we have studied.

Social Sciences, 2013

The paper investigated the impact of public sector investment in transport on economic growth, using Nigeria as a case study. The empirical model for the study was developed from the endogenous growth framework in which transport investment entered into the production function as input, using the Ordinary Least Squares (OLS) estimation technique and time series properties tests conducted on variables. Data for the study covered from 1977 to 2009. The findings showed that transportation played an insignificant role in the determination of economic growth in Nigeria. An increase in public funding and complete overhauling of the transportation system in the country are suggested.

2013

Often, it has been observed that telecommunication infrastructure development and economic growth proceed together. While this relationship has been studied in the context of developed (OECD) countries, in this study, we investigate this simultaneous relationship between telecommunications and the economic growth, using data for developing countries. Using 3SLS, we estimate a system of equations that endogenize economic growth and telecom penetration (respectively production function and demand for telecom services), along with supply of telecom investment and growth in telecom penetration. We estimate this system of equations separately for main telephone lines and cell phones. We find that while traditional economic factors explain demand for main line phones, they do not explain demand for cell phones. We also find significant impacts of cellular services on national output, when we control for the effects of capital and labour. The impact of telecom penetration on total output i...

2006

Empirical evidences on the importance of transport capital development in fastening productivity and economic development for panel sets, particularly for African countries and island state cases, have been very scarce in the literature. Such type of study is very important as public finance is limited and sustainable transport improvements usually have opportunity costs. Planners need guidance, based on solid empirical grounds, to aid in their decision to improve existing transportation and build new infrastructure. This study analyses the contribution of transport capital to growth for two different data sets namely for a sample of Sub Saharan African (SSA) countries and also for a developing states (SIDS) using both cross sectional and panel data analysis. In both sample cases, the analysis concluded that transport capital has been a contributor to the economic progress of these countries. Analysis further revealed that in the SSA case, the productivity of transport capital stock is superior as compared to that of overall capital. Such is not the case for the SIDS where transport capital is seen to have the average productivity level of overall capital stock.

Public investments in transport infrastructure have been widely used by policymakers as a tool to promote economic development. Transport infrastructure investment acts as a catalyst for productivity and economic growth. This study attempted to investigate the direction of causality between transport and economic growth in Bangladesh over 22 years, from 1999 to 2021. The coefficients of parameters in a simultaneous equation model are found via multivariate analysis and the three-stage least squares method. According to the estimated conclusion, GDP drives transport expansion and transport development considerably contributes to economic growth, which is ten times GDP. But compared to the transport elasticity of growth, the output elasticity of transport is lower. Additionally, this paper also shows that transport significantly enhances exports, marketing of agricultural goods, and industrial production.

Oradea Journal of Business and Economics, 2021

This study investigates the links between digital infrastructures (DI); transportation services (TS) and economic growth using simultaneous-equation panel data models for a panel of 62 countries for the period 2000-2018. The results indicate that there is evidence of bidirectional relationship between DI and economic process. Economic growth and TS are interrelated bidirectional relationship. Bidirectional link is validated between DI and TS for high-income and middle-income countries. Unidirectional causality is running from TS to DI for low incomes countries. These empirical insights are of particular interest to policymakers, working in low incomes countries. They help them to develop modern DI and TS to sustain economic development and to push substantial changes within the way of life and productivity. This has led to enormous technological advancement which is in line with but at a faster pace than the technological advancement of previous revolutions.

Extract of Final Project of Russell Iwhiwhu, in fulfilment of award of Honors. Submitted to OOU where they will be processed as consumed. In general, it can be said that transportation in rural areas is an important connector of rural areas of the nation.

Review of Agricultural and Applied Economics, 2014

Provision of efficient, reliable, and affordable infrastructure is essential for economic growth. Transportation infrastructure in particular, is vital to the prosperity of regions. To investigate the relationship and the direction of causality between transport infrastructure, investment in infrastructure and economic growth, we use panel cointegration analysis and panel causality analysis for three countries Armenia, Turkey, and Georgia. We use annual data of Armenia, Turkey and Georgia for the period 1982-2010.The tests proved the existence of more than one cointegrating vector indicating that the system under examination is stationary in more than one direction. The VECM results showed that gross capital formation and road/rail goods transported have a positive and statistically significant impact on economic growth in the short-run. Overall, the existence of bidirectional causality between economic growth and infrastructure investment, and between road and rail passengers carried and infrastructure investment was indicated in both the short and long-run.

Sustainability, 2018

This paper examines the link between the transport infrastructure and the economic performance in the EU-28 countries, over the period of time 2000–2014, using panel data methods. Firstly, we aim to provide the theoretical background of the transport infrastructure development, public sector performance and economic growth. The paper's key point is the detailed look at the components of transport infrastructure, analyzing the implications of the policy-makers based on a production function and in order to test the policy implication, factor analysis is also employed. The results show significant effects from transport infrastructure components even after institutional and other factors are controlled for. From the path analysis results, the study confirm the alternative hypothesis, outlining the unidirectional long-run causality relationship between growth, transport infrastructure and Public Sector Performance. Transport infrastructure status (measured thought index of transport...

deu.edu.tr

One of the processes that are alleged to constitute globalization is trade and investment. Improvements in highways, railways and ports facilitate the movement of the goods thus leading to higher standards of living for the people of the whole globe. Although infrastructure is indispensable to achieve the main development targets in developing countries, such as urbanization, industrialization, export growth and sustainable economic development , the relationship between infrastructure expenditures, economic growth and international trade is inconclusive. suggests that public investment is productive if it gives some places a local competitive advantage over other places. The aim of the study is to investigate the effects of investments on highway infrastructure in Turkey, on Turkey's international trade and economic growth for the period of 1970-2005. Results from cointegration and causality analysis suggest that there is only a weak relationship between highway transportation infrastructure, economic growth and international trade in Turkey.

Renewable and Sustainable Energy Reviews, 2016

This study examined the interactions between transportation infrastructure, financial penetration, and economic growth in the G-20 countries from 1961 to 2016. The aim was to investigate whether temporal causality exists between the variables. Using the panel vector error-correction model, we determined the long-run and short-run links between the variables. The study's most robust finding is that both financial penetration and transportation infrastructure stimulate economic growth in the long run. Short-run results, on the other hand, were non-uniform and depended on the specific measure of financial penetration and transportation infrastructure utilized. Transportation and its related infrastructures has played a pivotal role 1 in economic growth (Arvin,

This paper will set out to describe two of the main elements in the debate on transport and economic development. First it will argue that where there is already a well-connected transport infrastructure network, further investment will not on its own result in economic development. Transport infrastructure investment acts as a complement to other more important underlying conditions, which must be met if further economic development is to take place. Additional transport investment is not a necessary condition, but acts in a supporting role when other factors are at work. These factors will be presented as the necessary conditions that need to be met if economic development is to take place.

Contemporary Economic Policy, 1998

This paper explores empirically the relationship between infrastructure and economic growth by including the data of expenditure in infrastructure as a share of GDP in traditional growth crosscountry regressions. Since results are inconclusive, the paper elaborates some new indicators of investment in infrastructure employing physical units of infrastructure. They are positively and significantly correlated with growth in two different samples of countries.

Research in Transportation Economics, 2020

This paper examines the relationship between transport infrastructure and economic development in Pakistan. An autoregressive distributive lag (ARDL) and vector error correction model (VECM) is applied over the period 1971-2017. The results indicate that there is a long-run and causal relationship between transport infrastructure and economic development. Transport infrastructure has long-run positive impact on economic development. Furthermore, Granger causality test shows a unidirectional causality in long-run running from transport infrastructure to economic development. Interestingly, the impact of air infrastructure on economic development is statistically insignificant in long-run and short-run. The new results from this research provides a comprehensive picture of determinants of economic development from transport infrastructure in Pakistan and these new findings not only help policy makers but also can help to advance the current literature. Therefore, it is suggested that the government of Pakistan should concentrate more to increase the transport infrastructure for higher economic development.

The main objectives of the study were to examine the effect of infrastructure (i.e. railway network) on economic growth and to examine the direction of causality between economic growth and infrastructure using historical data covering the period of 1980 to 2016 and cointegration analysis. The findings from the study revealed a positive and significant effect of infrastructure on economic growth in the long-run however, the effect of infrastructure on economic growth was not significant in the short-run analysis. Also, the test of causality found a unidirectional causality running from economic growth to infrastructure. To increase economic growth in the United States, this study recommends that both the Federal and the State Government should increase its investments in infrastructure spending especially in railways.