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

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  • Abhijit Banerjee
  • Esther Duflo
  • Nancy Qian

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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17897.

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Date of creation: Mar 2012
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Handle: RePEc:nbr:nberwo:17897

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  1. Guy Michaels, 2006. "The effect of trade on the demand for skill - evidence from the interstate highway system," LSE Research Online Documents on Economics 19767, London School of Economics and Political Science, LSE Library.
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