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Infrastructure endowment and investment as determinants of regional growth in the European Union

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  • Crescenzi, Riccardo

    (Robert Schuman Centre of the European University Institute, Florence)

  • Rodriguez-Pose, Andres

    (London School of Economics)

Abstract

This paper analyses the role of infrastructure endowment and investment in the genesis of regional growth in the European Union. It assesses the economic effects of the existence and improvement of transport networks in light of their interactions with innovation and local socio-economic conditions. The analysis accounts for spatial interactions between different regions in the form of spillovers and network externalities. The regression results highlight the impact of infrastructural endowment on regional economic performance, but also the weak contribution of additional investment. Regions having good transport infrastructure endowment and being well connected to regions with similar good endowments tend to grow faster. However, investment in infrastructure within a region or in neighbouring regions seems to leave especially peripheral regions more vulnerable to competition. Furthermore, the positive impact of infrastructure endowment on growth tends to wane quickly and is weaker than that of, for example, the level of human capital.

Suggested Citation

  • Crescenzi, Riccardo & Rodriguez-Pose, Andres, 2008. "Infrastructure endowment and investment as determinants of regional growth in the European Union," EIB Papers 8/2008, European Investment Bank, Economics Department.
    • Handle: RePEc:ris:eibpap:2008_008
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    More about this item

    Keywords

    Economic growth; infrastructure; transport network; investment; innovation; spillovers; regions; endowment;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • 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
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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