The Relations between Infrastructure Investments and Imbalance Regional Economic Development in Great Britain

There are many causes of imbalance regional development. This study explores the idea that new infrastructure investment could subsequently lead and increased private construction investment differently over time and space. It further explores another idea – that the effects of each of the two kinds of infrastructure investment (social and economic) on each of the two main kinds of construction output, housing and commercial construction, may be quite different. In addition, yet another idea is explored – that the effects of increases either in the residential or the commercial built stock of a region may be that it calls-forth (provides the need and demand for) more infrastructure investment in that region – that infrastructure demand may be a function of the number of households, and, more particularly, of the number of dwellings, and of the amount of transport demand generated by commercial activities. Therefore, the aim of this research is to provide different views on the nature of the relationships between infrastructure investment and imbalance regional development in GB. The results show that the causal relationships differ across regions, and the economic infrastructure investment (transportation) has a deeper influence on both private commercial and residential investment than the social infrastructure. This research tries to improve the understanding the linkage between infrastructure investment and private construction investments in terms of their relations with economic growth, private property prices, and private construction outputs.