The productivity of transport infrastructure investment: A meta-analysis of empirical evidence
Investments in transport infrastructure have been widely used by decision makers to encourage economic growth, particularly during periods of economic downturn. There has been extensive research on the linkage between transport infrastructure and economic performance since the late 1980s, characterised by widely varying evidence. We conduct a meta-analysis of the empirical evidence on the output elasticity of transport infrastructure, based on a sample of 563 estimates obtained from 33 studies. Previous meta-analyses have focused on total public capital and hence cannot appropriately explain the wide variation in the productivity effect of transport infrastructure nor provide guidance to policymakers on the returns to investment in different types of transport infrastructure. Our results indicate that the existing estimates of the productivity effect of transport infrastructure can vary across main industry groups, tend to be higher for the US economy than for European countries, and are higher for roads compared to other modes of transport. The variation in the estimates of the output elasticity of transport is also explained by differences in the methods and data used in previous studies. Failing to control for unobserved heterogeneity and spurious associations tends to result in higher values, while failing to control for urbanisation and congestion levels leads to omitted variable bias. These findings can be used to inform future research on the choice of model specification and estimation and transport-related policy making.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mary Finn, 1993. "Is all government capital productive?," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 53-80.
- Ottaviano, Gianmarco & Melitz, Marc, 2008.
"Market Size, Trade, and Productivity,"
3229096, Harvard University Department of Economics.
- Marc J. Melitz & Gianmarco I.P. Ottaviano, 2005. "Market Size, Trade, and Productivity," NBER Working Papers 11393, National Bureau of Economic Research, Inc.
- Marc J. Melitz & Gianmarco I.P. Ottaviano, 2005. "Market Size, Trade, and Productivity," Development Working Papers 201, Centro Studi Luca d\'Agliano, University of Milano.
- Tony Venables, 2004.
"Evaluating urban transport improvements: cost benefit analysis in the presence of agglomeration and income taxation,"
LSE Research Online Documents on Economics
2205, London School of Economics and Political Science, LSE Library.
- Anthony J. Venables, 2007. "Evaluating Urban Transport Improvements: Cost-Benefit Analysis in the Presence of Agglomeration and Income Taxation," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 41(2), pages 173-188, May.
- Anthony J. Venables, 2004. "Evaluating Urban Transport Improvements: Cost Benefit Analysis in the Presence of Agglomeration and Income Taxation," CEP Discussion Papers dp0651, Centre for Economic Performance, LSE.
- Duarte Bom, P.R. & Ligthart, J.E., 2008.
"How Productive is Public Capital? A Meta-Analysis,"
2008-10, Tilburg University, Center for Economic Research.
- Garcia-Mila, Teresa & McGuire, Therese J & Porter, Robert H, 1996.
"The Effect of Public Capital in State-Level Production Functions Reconsidered,"
The Review of Economics and Statistics,
MIT Press, vol. 78(1), pages 177-80, February.
- Teresa Garcia-Milà & Therese J. McGuire & Robert H. Porter, 1993. "The effect of public capital in state-level production functions reconsidered," Economics Working Papers 36, Department of Economics and Business, Universitat Pompeu Fabra.
- T. D. Stanley & Stephen B. Jarrell, 2005.
"Meta-Regression Analysis: A Quantitative Method of Literature Surveys,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 19(3), pages 299-308, 07.
- Stanley, T D & Jarrell, Stephen B, 1989. " Meta-Regression Analysis: A Quantitative Method of Literature Survey s," Journal of Economic Surveys, Wiley Blackwell, vol. 3(2), pages 161-70.
- Federico Bonaglia & Eliana La Ferrara & Massimiliano Marcellino, .
"Public Capital and Economic Performance: Evidence from Italy,"
163, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Federico Bonaglia & Eliana La Ferrara & Massimiliano Marcellino, 2000. "Public Capital and Economic Performance: Evidence from Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 59(2), pages 221-244, September.
- William E. Cullison, 1993. "Public investment and economic growth," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 19-34.
- Angel De la Fuente, 2010.
"Infrastructures and productivity: an updated survey,"
1018, BBVA Bank, Economic Research Department.
- Angel de la Fuente, 2010. "Infrastructures and Productivity: an Updated Survey," Working Papers 475, Barcelona Graduate School of Economics.
- Angel de la Fuente, 2010. "Infrastructures and productivity: an updated survey," UFAE and IAE Working Papers 831.10, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Stephen B. Jarrell & T. D. Stanley, 1990. "A meta-analysis of the union-nonunion wage gap," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 44(1), pages 54-67, October.
- Xueliang Zhang, 2008. "Transport infrastructure, spatial spillover and economic growth: Evidence from China," Psychometrika, Springer, vol. 3(4), pages 585-597, December.
- Richard E. Baldwin & Toshihiro Okubo, 2006.
"Heterogeneous firms, agglomeration and economic geography: spatial selection and sorting,"
Journal of Economic Geography,
Oxford University Press, vol. 6(3), pages 323-346, June.
- Richard Baldwin & Toshihiro Okubo, 2005. "Heterogeneous Firms, Agglomeration and Economic Geography: Spatial Selection and Sorting," NBER Working Papers 11650, National Bureau of Economic Research, Inc.
- Boarnet, Marlon G., 1996. "The Direct and Indirect Economic Effects of Transportation Infrastructure," University of California Transportation Center, Working Papers qt1506r290, University of California Transportation Center.
- Randall W. Eberts & Daniel P. McMillen, 1999.
"Agglomeration Economies and Urban Public Infrastructure,"
Book chapters authored by Upjohn Institute researchers,
in: Paul Cheshire & Edwin S. Mills (ed.), handbook or Regional and Urban Economics, volume 3, pages 1455-1495
W.E. Upjohn Institute for Employment Research.
- Eberts, Randall W. & McMillen, Daniel P., 1999. "Agglomeration economies and urban public infrastructure," Handbook of Regional and Urban Economics, in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 38, pages 1455-1495 Elsevier.
- Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-96, September.
- Melo, Patricia C. & Graham, Daniel J. & Noland, Robert B., 2009. "A meta-analysis of estimates of urban agglomeration economies," Regional Science and Urban Economics, Elsevier, vol. 39(3), pages 332-342, May.
- Evans, Paul & Karras, Georgios, 1994. "Are Government Activities Productive? Evidence from a Panel of U.S. States," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 1-11, February.
- John Fernald, 1997.
"Roads to prosperity? assessing the link between public capital and productivity,"
International Finance Discussion Papers
592, Board of Governors of the Federal Reserve System (U.S.).
- John G. Fernald, 1999. "Roads to Prosperity? Assessing the Link between Public Capital and Productivity," American Economic Review, American Economic Association, vol. 89(3), pages 619-638, June.
- Card, David & Krueger, Alan B, 1995. "Time-Series Minimum-Wage Studies: A Meta-analysis," American Economic Review, American Economic Association, vol. 85(2), pages 238-43, May.
- Ozbay, Kaan & Ozmen-Ertekin, Dilruba & Berechman, Joseph, 2007. "Contribution of transportation investments to county output," Transport Policy, Elsevier, vol. 14(4), pages 317-329, July.
- Daniel Graham & Kurt Dender, 2011. "Estimating the agglomeration benefits of transport investments: some tests for stability," Transportation, Springer, vol. 38(3), pages 409-426, May.
- Volker Nocke, 2003.
"A Gap for Me: Entrepreneurs and Entry,"
PIER Working Paper Archive
05-026, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 29 Sep 2005.
- Smith, V. Kerry & Kaoru, Yoshiaki, 1990. "What have we learned since hotelling's letter? : A meta-analysis," Economics Letters, Elsevier, vol. 32(3), pages 277-281, March.
- ZHANG Xueliang, 2008. "Transport infrastructure, spatial spillover and economic growth: Evidence from China," Frontiers of Economics in China, Higher Education Press, vol. 3(4), pages 585-597, December.
- Alfredo M. Pereira, 2000. "Is All Public Capital Created Equal?," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 513-518, August.
- Garcia-Mila, Teresa & McGuire, Therese J., 1992. "The contribution of publicly provided inputs to states' economies," Regional Science and Urban Economics, Elsevier, vol. 22(2), pages 229-241, June.
- Alicia H. Munnell, 1992. "Policy Watch: Infrastructure Investment and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 189-198, Fall.
- Daniel J. Graham, 2007. "Agglomeration, Productivity and Transport Investment," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 41(3), pages 317-343, September.
- Baltagi, Badi H & Pinnoi, Nat, 1995. "Public Capital Stock and State Productivity Growth: Further Evidence from an Error Components Model," Empirical Economics, Springer, vol. 20(2), pages 351-59.
- Pinnoi, Nat, 1994. "Public infrastructure and private production measuring relative contributions," Journal of Economic Behavior & Organization, Elsevier, vol. 23(2), pages 127-148, March.
- Rietveld, Piet, 1994. "Spatial economic impacts of transport infrastructure supply," Transportation Research Part A: Policy and Practice, Elsevier, vol. 28(4), pages 329-341, July.
- Pedro Cantos & Mercedes Gumbau‐Albert & Joaqu�N Maudos, 2003. "Transport infrastructures, spillover effects and regional growth: evidence of the Spanish case," Transport Reviews, Taylor & Francis Journals, vol. 25(1), pages 25-50, December.
- Sturm, Jan-egbert & Jacobs, Jan & Groote, Peter, 1999. "Output Effects of Infrastructure Investment in the Netherlands, 1853-1913," Journal of Macroeconomics, Elsevier, vol. 21(2), pages 355-380, April.
- Walsh, Richard G. & Johnson, Donn M. & McKean, John R., 1989. "Issues In Nonmarket Valuation And Policy Application: A Retrospective Glance," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(01), July.
- Rosina Moreno & Enrique LÃ³pez-Bazo, 2007. "Returns to Local and Transport Infrastructure under Regional Spillovers," International Regional Science Review, , vol. 30(1), pages 47-71, January.
- Maria Jesus Delgado & Inmaculada Alvarez, 2007. "Network infrastructure spillover in private productive sectors: evidence from Spanish high capacity roads," Applied Economics, Taylor & Francis Journals, vol. 39(12), pages 1583-1597.
- David A. Aschauer, 1990. "Highway capacity and economic growth," Economic Perspectives, Federal Reserve Bank of Chicago, issue Sep, pages 14-24.
- Raymond Batina, 1998. "On the Long Run Effects of Public Capital and Disaggregated Public Capital on Aggregate Output," International Tax and Public Finance, Springer, vol. 5(3), pages 263-281, July.
When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:43:y:2013:i:5:p:695-706. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.