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The role of infrastructure investment location in China's western development

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  • Xubei Luo

Abstract

Development of the western region is vital to the balanced growth of China. The author studies the impacts of infrastructure investment that may most efficiently alleviate the burden of geographical remoteness of the West. Having constructed the ?adjusted distance? to approximate the transport cost, which takes into account the effects of real distance and infrastructure development, the author defines the ?peripheral degree? to measure the effective remoteness of a province to an economic center. Using panel data for 1979?99 from the Chinese provinces, she shows that geographic attractiveness plays a significant role in aSolow-type growth determination model. Given the invariability of pure geographic position, progress in transportation facilities is essential to reduce the geographic handicap and to encourage the catching-up of the western region. The author?s simulation results show that the central transportation hubs (Hubei, Henan, and Hunan) merit most infrastructure investments, for they favor the development of many provinces, if regional balanced growth is considered as the prime objective. In particular, improvement in the transportation facilities in central hubs will have greater effects on western development than that in the western region by itself. Improvements in the transportation facilities of the central hubs substantially improves the geographic attractiveness of the western region by reducing the transport cost from the West to the Coast and by promoting the emergence of new economic centers in such hubs, which tends to modify the national economic geographic structure.

Suggested Citation

  • Xubei Luo, 2004. "The role of infrastructure investment location in China's western development," Policy Research Working Paper Series 3345, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3345
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    Cited by:

    1. World Bank, 2007. "China's Expressways : Connecting People and Markets for Equitable Development," World Bank Publications - Reports 7933, The World Bank Group.
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    3. Yang, Fang & Zhang, Dingzhong & Sun, Chuanwang, 2016. "China׳s regional balanced development based on the investment in power grid infrastructure," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 1549-1557.
    4. McCulloch, Neil & Sjahrir, Bambang Suharnoko, 2008. "Endowments, location or luck ? evaluating the determinants of sub-national growth in decentralized Indonesia," Policy Research Working Paper Series 4769, The World Bank.
    5. Bergantino, Angela Stefania & Capozza, Claudia & Spiru, Ada, 2021. "Multilevel analysis of firms’ performance in Emerging Economies: The role of transport infrastructures and logistics as contextual factors," Working Papers 21_2, SIET Società Italiana di Economia dei Trasporti e della Logistica.
    6. Shi, Yingying & Guo, Shen & Sun, Puyang, 2017. "The role of infrastructure in China’s regional economic growth," Journal of Asian Economics, Elsevier, vol. 49(C), pages 26-41.

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