Spatial Regression Modeling with Economic Growth and Productivity Dynamics

Infrastructure investment, especially transportation investment from both public and private sectors are crucial to economic development in explicit and implicit ways. Directly, regional transportation investment is one important component of gross regional product. While transportation is regarded as public good with externalities in productivity, productivity itself also brings spatial externality for the neighbourhood from the origin. This paper paid attention to the twin roles of direct impact and spatial spillover effect from regional transportation investment on local and neighbourhood economic growth. With the implement of Cobb-Douglas Production function, total factor productivity (TFP) is decomposed with respect to productivity dynamics. Transportation investment and exclusive private investment are studied as the evolve engines for productivity dynamics. Empirically, this paper conducted spatial regression test on provincial data from 1982 to 2008 in China, with the variables of province-level real gross regional product (GRP), labor, capital stock, transportation investment and non-transportation private sector investment. Data source is from National Bureau of Statistics of China and the University of Michigan’s China Data Online Archive. Under the consideration of policy changes and the resulted boom of transportation construction, the paper finds that during 1982-1992, the spatial spillover effect from transportation investment is positive and moderate, while after 1993 the spillover effect is significantly negative. Fiscal decentralization, decreasing marginal return of transportation investment and the Crowding-out Effect in private investment from transportation investment are believed to be the possible sources of the negative influence, while decreasing transaction cost and increasing market accessibility may contribute to the positive spillovers.

• Supplemental Notes:
  • This paper was sponsored by TRB committee ABE20 Transportation Economics.
• Corporate Authors:

  Transportation Research Board

  500 Fifth Street, NW
  Washington, DC  United States  20001
• Authors:
  • Xiong, Chenfeng
  • Guo, Wei
  • Jiang, Xiushan
  • Zhang, Lei
• Conference:
  • Transportation Research Board 94th Annual Meeting
  • Location: Washington DC, United States
  • Date: 2015-1-11 to 2015-1-15
• Date: 2015

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References; Tables;
• Pagination: 12p
• Monograph Title: TRB 94th Annual Meeting Compendium of Papers

Subject/Index Terms

• TRT Terms: Economic growth; Economic impacts; Economic indicators; Investments; Productivity; Regional analysis; Regression analysis
• Geographic Terms: China
• Subject Areas: Economics; Transportation (General); I10: Economics and Administration;

Filing Info

• Accession Number: 01554409
• Record Type: Publication
• Report/Paper Numbers: 15-4507
• Files: TRIS, TRB, ATRI
• Created Date: Feb 26 2015 9:49AM