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Public Investment in Transportation and Communication and Growth: A Dynamic Panel Approach

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  • M E Haque
  • D H Kim

Abstract

This paper investigates the relationship between public investment in transportation and communication and economic growth using traditional instrumental estimation and a mixed fixed and random coefficient approach in the context of a dynamic panel framework. We find that there is a dynamic effect of public investment in transportation and communication on economic growth and its impact is positive. In comparison with earlier studies, our estimtaed coefficients are somewhat lower. However, for the reverse causal relationship proposed by the investment acceleration hypothesis, we find that there is significant heterogeneity across countries and our empirical study does not support the presence of reverse causality.
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  • M E Haque & D H Kim, 2003. "Public Investment in Transportation and Communication and Growth: A Dynamic Panel Approach," The School of Economics Discussion Paper Series 0324, Economics, The University of Manchester.
  • Handle: RePEc:man:sespap:0324
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    Cited by:

    1. Joharji Ghazi A. & Starr Martha A, 2011. "Fiscal Policy and Growth in Saudi Arabia," Review of Middle East Economics and Finance, De Gruyter, vol. 6(3), pages 24-45, February.
    2. Sanz Labrador, Ismael & Sanz-Sanz, José Félix, 2013. "Política fiscal y crecimiento económico: consideraciones microeconómicas y relaciones macroeconómicas," Macroeconomía del Desarrollo 134, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    3. Bekzod ABDULLAEV & Laszlo KONYA, 2014. "Growth Maximizing Tax Rate for Uzbekistan," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(1), pages 59-72.
    4. Chiara Del Bo & Massimo Florio & Giancarlo Manzi, 2010. "Regional Infrastructure and Convergence: Growth Implications in a Spatial Framework," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 17(3), pages 475-493, September.
    5. World Bank, 2010. "Indonesia : Agriculture Public Expenditure Review 2010," World Bank Other Operational Studies 13069, The World Bank.
    6. Usman.A & Mobolaji H. I & Kilishi A.A & Yaru M. A & Yakubu, T. A, 2011. "Public Expenditure And Economic Growth In Nigeria," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 1(3), pages 104-113, September.

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