IDEAS home Printed from https://ideas.repec.org/p/diw/diwwpp/dp1848.html
   My bibliography  Save this paper

Economic Effects of Transportation Infrastructure Quantity and Quality: A Study of German Counties

Author

Listed:
  • Dennis Gaus
  • Heike Link

Abstract

In this paper, we analyze the impact of transportation infrastructure quantity and quality on regional economic production. We exploit an extensive panel dataset on the German county level (N=401), expressing the capital value and condition of highways between 2007 and 2016, to estimate a spatially extended translog production function. The spatial specification uses SLX and SDEM models, with various linear and nonlinear variants estimated using FGLS and GMM estimators accounting for endogeneity. We find, in line with existing research, a positive impact of the quantity of transport infrastructure both locally and supra-regionally. We furthermore provide evidence for the claim that insufficient maintenance and low infrastructure conditions significantly slow economic growth through a negative correlation between GDP and the quality grade of highways. A more detailed analysis, distinguishing different types of highways and constructions, confirms these findings and underlines the importance of the Bundesstraßen network as compared to the Autobahn system. The estimated impact of the quality of bridges is rather ambiguous and requires further research to achieve a better understanding.

Suggested Citation

  • Dennis Gaus & Heike Link, 2020. "Economic Effects of Transportation Infrastructure Quantity and Quality: A Study of German Counties," Discussion Papers of DIW Berlin 1848, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1848
    as

    Download full text from publisher

    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.704299.de/dp1848.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Badi H. Baltagi, 2021. "Simultaneous Equations with Error Components," Springer Texts in Business and Economics, in: Econometric Analysis of Panel Data, edition 6, chapter 0, pages 157-186, Springer.
    2. Stefania Cosci & Loredana Mirra, 2018. "A spatial analysis of growth and convergence in Italian provinces: the role of road infrastructure," Regional Studies, Taylor & Francis Journals, vol. 52(4), pages 516-527, April.
    3. Pierre‐Richard Agénor, 2009. "Infrastructure Investment and Maintenance Expenditure: Optimal Allocation Rules in a Growing Economy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(2), pages 233-250, April.
    4. Kevin T. Duffy-Deno & Randall W. Eberts, 1996. "Public Infrastructure and Regional Economic Development: A Simultaneous Equations Approach," Book chapters authored by Upjohn Institute researchers, in: Niles Hansen & Kenneth J. Button & Peter Nijkamp (ed.),Regional Policy and Regional Integration, pages 295-309, W.E. Upjohn Institute for Employment Research.
    5. Pierre-Richard Agénor, 2005. "Infrastructure Investment and Maintenance Expenditure: Optimal Allocation Rules in a Growing," Economics Discussion Paper Series 0537, Economics, The University of Manchester.
    6. Douglas Holtz-Eakin & Amy Schwartz, 1995. "Spatial productivity spillovers from public infrastructure: Evidence from state highways," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(3), pages 459-468, October.
    7. Yoshino, Naoyuki & Abidhadjaev, Umid, 2017. "An impact evaluation of investment in infrastructure: The case of a railway connection in Uzbekistan," Journal of Asian Economics, Elsevier, vol. 49(C), pages 1-11.
    8. Baltagi, Badi H. & Liu, Long, 2011. "Instrumental variable estimation of a spatial autoregressive panel model with random effects," Economics Letters, Elsevier, vol. 111(2), pages 135-137, May.
    9. Cornwell, Christopher & Schmidt, Peter & Wyhowski, Donald, 1992. "Simultaneous equations and panel data," Journal of Econometrics, Elsevier, vol. 51(1-2), pages 151-181.
    10. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    11. Hsiao, Cheng & Zhou, Qiankun, 2015. "Statistical inference for panel dynamic simultaneous equations models," Journal of Econometrics, Elsevier, vol. 189(2), pages 383-396.
    12. Melo, Patricia C. & Graham, Daniel J. & Brage-Ardao, Ruben, 2013. "The productivity of transport infrastructure investment: A meta-analysis of empirical evidence," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 695-706.
    13. Holmgren, Johan & Merkel, Axel, 2017. "Much ado about nothing? – A meta-analysis of the relationship between infrastructure and economic growth," Research in Transportation Economics, Elsevier, vol. 63(C), pages 13-26.
    14. Stephan Brunow & Georg Hirte, 2009. "The age pattern of human capital and regional productivity: A spatial econometric study on german regions," Papers in Regional Science, Wiley Blackwell, vol. 88(4), pages 799-823, November.
    15. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    16. Pereira, Alfredo Marvao & Roca-Sagales, Oriol, 2003. "Spillover effects of public capital formation: evidence from the Spanish regions," Journal of Urban Economics, Elsevier, vol. 53(2), pages 238-256, March.
    17. Yu, Nannan & de Jong, Martin & Storm, Servaas & Mi, Jianing, 2013. "Spatial spillover effects of transport infrastructure: evidence from Chinese regions," Journal of Transport Geography, Elsevier, vol. 28(C), pages 56-66.
    18. Möller, J. & Zierer, M., 2018. "Autobahns and jobs: A regional study using historical instrumental variables," Journal of Urban Economics, Elsevier, vol. 103(C), pages 18-33.
    19. Barzin, Samira & D'Costa, Sabine & Graham, Daniel J., 2018. "A pseudo – panel approach to estimating dynamic effects of road infrastructure on firm performance in a developing country context," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 20-34.
    20. Badi H. Baltagi, 2015. "Simultaneous Equations Model," Springer Texts in Business and Economics, in: Solutions Manual for Econometrics, edition 3, chapter 0, pages 259-311, Springer.
    21. Yang, Kai & Lee, Lung-fei, 2019. "Identification and estimation of spatial dynamic panel simultaneous equations models," Regional Science and Urban Economics, Elsevier, vol. 76(C), pages 32-46.
    22. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    23. Uwe Kunert & Heike Link, 2013. "Transport Infrastructure: Higher Investments Needed to Preserve Assets," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 3(10), pages 12-20.
    24. Börjesson, Maria & Isacsson, Gunnar & Andersson, Matts & Anderstig, Christer, 2018. "Agglomeration, productivity and the role of transport system improvements," Working papers in Transport Economics 2018:16, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    25. Gilles Duranton & Matthew A. Turner, 2012. "Urban Growth and Transportation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(4), pages 1407-1440.
    26. Arbués, Pelayo & Baños, José F. & Mayor, Matías, 2015. "The spatial productivity of transportation infrastructure," Transportation Research Part A: Policy and Practice, Elsevier, vol. 75(C), pages 166-177.
    27. Börjesson, Maria & Isacsson, Gunnar & Andersson, Matts & Anderstig, Christer, 2019. "Agglomeration, productivity and the role of transport system improvements," Economics of Transportation, Elsevier, vol. 18(C), pages 27-39.
    28. Hirte, Georg & Brunow, Stephan, 2008. "The age pattern of human capital and regional productivity," Dresden Discussion Paper Series in Economics 01/08, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    29. Lee, Lung-fei & Yu, Jihai, 2014. "Efficient GMM estimation of spatial dynamic panel data models with fixed effects," Journal of Econometrics, Elsevier, vol. 180(2), pages 174-197.
    30. Pedro R.D. Bom & Jenny E. Ligthart, 2014. "What Have We Learned From Three Decades Of Research On The Productivity Of Public Capital?," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 889-916, December.
    31. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    32. Solmaria Halleck Vega & J. Paul Elhorst, 2015. "The Slx Model," Journal of Regional Science, Wiley Blackwell, vol. 55(3), pages 339-363, June.
    33. Eduardo Amaral Haddad & Fernando Salgueiro Perobelli & Edson Paulo Domingues & Mauricio Aguiar, 2011. "Assessing the ex ante economic impacts of transportation infrastructure policies in Brazil," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 3(1), pages 44-61.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sénquiz-Díaz Cynthia, 2021. "Effect Size of Logistics: Evidence from Selected Countries," LOGI – Scientific Journal on Transport and Logistics, Sciendo, vol. 12(1), pages 123-134, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elburz, Zeynep & Nijkamp, Peter & Pels, Eric, 2017. "Public infrastructure and regional growth: Lessons from meta-analysis," Journal of Transport Geography, Elsevier, vol. 58(C), pages 1-8.
    2. Arthur Grimes & Eyal Apatov & Larissa Lutchmann & Anna Robinson, 2014. "Infrastructure?s Long-Lived Impact on Urban Development: Theory and Empirics," ERSA conference papers ersa14p178, European Regional Science Association.
    3. Konno, Akio & Kato, Hironori & Takeuchi, Wataru & Kiguchi, Riku, 2021. "Global evidence on productivity effects of road infrastructure incorporating spatial spillover effects," Transport Policy, Elsevier, vol. 103(C), pages 167-182.
    4. Álvarez, Inmaculada C. & Barbero, Javier & Zofío, José L., 2016. "A spatial autoregressive panel model to analyze road network spillovers on production," Transportation Research Part A: Policy and Practice, Elsevier, vol. 93(C), pages 83-92.
    5. Qi, Guanqiu & Shi, Wenming & Lin, Kun-Chin & Yuen, Kum Fai & Xiao, Yi, 2020. "Spatial spillover effects of logistics infrastructure on regional development: Evidence from China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 135(C), pages 96-114.
    6. Marinos, Theocharis & Belegri-Roboli, Athena & Michaelides, Panayotis G. & Konstantakis, Konstantinos Ν., 2022. "The spatial spillover effect of transport infrastructures in the Greek economy (2000–2013): A panel data analysis," Research in Transportation Economics, Elsevier, vol. 94(C).
    7. Rokicki, Bartlomiej & Stępniak, Marcin, 2018. "Major transport infrastructure investment and regional economic development – An accessibility-based approach," Journal of Transport Geography, Elsevier, vol. 72(C), pages 36-49.
    8. Bottasso, Anna & Conti, Maurizio & Costacurta de Sa Porto, Paulo & Ferrari, Claudio & Tei, Alessio, 2021. "Roads to growth: The Brazilian way," Research in Transportation Economics, Elsevier, vol. 90(C).
    9. Wu, Guiying Laura & Feng, Qu & Wang, Zhifeng, 2021. "A structural estimation of the return to infrastructure investment in China," Journal of Development Economics, Elsevier, vol. 152(C).
    10. Fageda, Xavier & Gonzalez-Aregall, Marta, 2017. "Do all transport modes impact on industrial employment? Empirical evidence from the Spanish regions," Transport Policy, Elsevier, vol. 55(C), pages 70-78.
    11. Xiao Ke & Yuanke Yan, 2021. "Can proactive fiscal policy achieve the goal of “Beyond Keynesianism”?," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 1078-1103, May.
    12. MAÏ ASSAN CHEDI, Maman, 2022. "Does Defence Expenditure Affect Education and Health expenditures in Saharan Africa?," African Journal of Economic Review, African Journal of Economic Review, vol. 10(4), September.
    13. Najkar, N. & Kohansal, M. R. & Ghorbani, M., 2018. "Estimating Spatial Effects of Transport Infrastructure on Agricultural Output of Iran," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 10(2).
    14. Nigel Driffield & Vidya Mahambare & Sarmistha Pal, 2005. "How Ownership Structure Affects Capital Structure and Firm Performance? Recent Evidence from East Asia," Finance 0505010, University Library of Munich, Germany.
    15. Gokcen Yilmaz, 2018. "Composition of public investment and economic growth: evidence from Turkish provinces, 1975-2001," Public Sector Economics, Institute of Public Finance, vol. 42(2), pages 187-214.
    16. Mitze, Timo & Stephan, Andreas, 2013. "Simultaneous-equations Analysis in Regional Science and Economic Geography," Working Paper Series in Economics and Institutions of Innovation 309, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    17. Harald Oberhofer & Christian Glocker & Werner Hölzl & Peter Huber & Serguei Kaniovski & Klaus Nowotny & Michael Pfaffermayr & Monique Ebell & Nikolaos Kontogiannis, 2016. "Single Market Transmission Mechanisms Before, During and After the 2008-09 Crisis. A Quantitative Assessment," WIFO Studies, WIFO, number 59156, February.
    18. Freiria, Susana & Sousa, Nuno & Calvo-Poyo, Francisco, 2022. "Spatial analysis of the impact of transport accessibility on regional performance: A study for Europe," Journal of Transport Geography, Elsevier, vol. 102(C).
    19. Xavier Fageda & Marta Gonzalez-Aregall, 2014. "“The Spatial effects of transportation on industrial employment ”," IREA Working Papers 201429, University of Barcelona, Research Institute of Applied Economics, revised Nov 2014.
    20. Nawaz, Saima & Mangla, Inayat Ullah, 2021. "The economic geography of infrastructure in Asia: The role of institutions and regional integration," Research in Transportation Economics, Elsevier, vol. 88(C).

    More about this item

    Keywords

    Transport; Infrastructure; Public Capital; Economic Growth; Regional Development;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp1848. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/diwbede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.