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On the Road: Access to Transportation Infrastructure and Economic Growth in China

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  • Banerjee, Abhijit
  • Duflo, Esther
  • Qian, Nancy

Abstract

This paper estimates the effect of access to transportation networks on regional economic outcomes in China over a twenty-period of rapid income growth. It addresses the problem of the endogenous placement of networks by exploiting the fact that these networks tend to connect historical cities. Our results show that proximity to transportation networks have a moderate positive causal effect on per capita GDP levels across sectors, but no effect on per capita GDP growth. We provide a simple theoretical framework with empirically testable predictions to interpret our results. We argue that our results are consistent with factor mobility playing an important role in determining the economic benefits of infrastructure development.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8874.

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Date of creation: Mar 2012
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Handle: RePEc:cpr:ceprdp:8874

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Keywords: firms; growth; inequality; infrastructure;

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References

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  1. Chang-Tai Hsieh & Peter J Klenow, 2008. "Misallocation and Manufacturing TFP in China and India," 2008 Meeting Papers 121, Society for Economic Dynamics.
  2. Dave Donaldson, 2010. "Railroads of the Raj: Estimating the Impact of Transportation Infrastructure," NBER Working Papers 16487, National Bureau of Economic Research, Inc.
  3. Edward L. Glaeser & Joshua D. Gottlieb, 2009. "The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 983-1028, December.
  4. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988. "Estimating Vector Autoregressions with Panel Data," Econometrica, Econometric Society, vol. 56(6), pages 1371-95, November.
  5. Allen J. Scott, 2009. "World Development Report 2009: reshaping economic geography," Journal of Economic Geography, Oxford University Press, vol. 9(4), pages 583-586, July.
  6. Jeremy Atack & Fred Bateman & Michael Haines & Robert A. Margo, 2009. "Did Railroads Induce or Follow Economic Growth? Urbanization and Population Growth in the American Midwest, 1850-60," NBER Working Papers 14640, National Bureau of Economic Research, Inc.
  7. Mohsin S. Khan & Zuliu Hu, 1996. "Why is China Growing So Fast?," IMF Working Papers 96/75, International Monetary Fund.
  8. Fogel, Robert William, 1962. "A Quantitative Approach to the Study of Railroads in American Economic Growth: A Report of Some Preliminary Findings," The Journal of Economic History, Cambridge University Press, vol. 22(02), pages 163-197, June.
  9. Wolfgang Keller & Carol H. Shiue, 2008. "Institutions, Technology, and Trade," NBER Working Papers 13913, National Bureau of Economic Research, Inc.
  10. Esther Duflo, 2002. "The Medium Run Effects of Educational Expansion: Evidence from a Large School Construction Program in Indonesia," NBER Working Papers 8710, National Bureau of Economic Research, Inc.
  11. Guy Michaels, 2006. "The Effect of Trade on the Demand for Skill - Evidence from the Interstate Highway System," CEP Discussion Papers dp0772, Centre for Economic Performance, LSE.
  12. Yaohui Zhao, 1999. "Leaving the Countryside: Rural-to-Urban Migration Decisions in China," American Economic Review, American Economic Association, vol. 89(2), pages 281-286, May.
  13. Meng, Xin, 2005. "Introduction: Poverty and labor markets in China," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 641-643, December.
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