The role of infrastructure in China's regional economic growth

Yingying Shi, Shen Guo, Puyang Sun

Research output: Journal PublicationArticlepeer-review

55 Citations (Scopus)

Abstract

This study investigates the relationship between infrastructure capital and China's regional economic growth for the period 1990–2013. Four types of infrastructure are considered: electricity generating capacity, roadway, railway, and telecommunications. Using a vector error correction model, we find mixed support across time period and region for the contribution of infrastructure investment to economic development. With regard to road construction in lagging regions in particular, the impact appears to have become negative under a program of ramped up efforts. The results resonate with the theoretical literature on the inverse U-shaped relationship between infrastructure investment and growth which posits a “crowding-out effect” of private capital when infrastructure investment becomes too dominant.

Original languageEnglish
Pages (from-to)26-41
Number of pages16
JournalJournal of Asian Economics
Volume49
DOIs
Publication statusPublished - 1 Apr 2017
Externally publishedYes

Keywords

  • Dynamic panel data
  • Economic growth
  • Infrastructure
  • Regional inequality

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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