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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-year 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 moderately sized 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.

Suggested Citation

  • Banerjee, Abhijit & Duflo, Esther & Qian, Nancy, 2020. "On the road: Access to transportation infrastructure and economic growth in China," Journal of Development Economics, Elsevier, vol. 145(C).
  • Handle: RePEc:eee:deveco:v:145:y:2020:i:c:s0304387820300171
    DOI: 10.1016/j.jdeveco.2020.102442
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    Keywords

    Infrastructure; Growth; Inequality; Firms;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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