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How relevant is infrastructure to growth in East Asia ?

Author

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  • Seethepalli, Kalpana
  • Bramati, Maria Caterina
  • Veredas, David

Abstract

This paper seeks to shed some light on the extent to which infrastructure sub-sectors - energy, telecommunications, water supply, sanitation, and transport - contributed to growth in East Asia during 1985-2004. It also attempts to provide additional insights on whether the relationship between infrastructure and growth depends on five additional variables: the degree of private participation in infrastructure, the quality of governance, the extent of rural-urban inequality in access to infrastructure services, country income levels, as well as geography. The findings show that greater stocks of infrastructure were indeed associated with higher growth. However, a more nuanced look at the sensitivity of infrastructure impacts on the five additional variables yields different results, with some sectors supporting conventional expectations and others yielding mixed or counter-intuitive results. In particular, the telecom and sanitation sectors yield statistically significant results supporting the a priori hypotheses; electricity and water infrastructure provide mixed results; and road infrastructure consistently contradicts a priori expectations. The results are consistent with the widely-accepted idea in policy research that infrastructure plays an important role in promoting growth, as well as with the viewpoint that certain countries'endowments influence the growth-related impacts of infrastructure.

Suggested Citation

  • Seethepalli, Kalpana & Bramati, Maria Caterina & Veredas, David, 2008. "How relevant is infrastructure to growth in East Asia ?," Policy Research Working Paper Series 4597, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4597
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    Cited by:

    1. Minsoo Lee & Xuehui Han & Raymond Gaspar & Emmanuel Alano, 2018. "Deriving Macroeconomic Benefits from Public–Private Partnerships in Developing Asia," Working Papers id:12888, eSocialSciences.
    2. Imran Ur Rahman & Mohsin Shafi & Liu Junrong & Enitilina Tatiani M.K. Fetuu & Shah Fahad & Buddhi Prasad Sharma, 2021. "Infrastructure and Trade: An Empirical Study Based on China and Selected Asian Economies," SAGE Open, , vol. 11(3), pages 21582440211, July.
    3. Yasir Khan & Taimoor Hassan & Cai Shukai & Hana Oubaih & Muhammad Nisar Khan & Jawed Kootwal & Ubaid Ur Rahman Rehimi, 2022. "The nexus between infrastructure development, economic growth, foreign direct investment, and trade: an empirical investigation from China’s regional trade data," SN Business & Economics, Springer, vol. 2(7), pages 1-31, July.
    4. Eric Manes, 2009. "Pakistan's Investment Climate : Laying the Foundation for Growth, Volume 2. Annexes," World Bank Publications - Reports 12411, The World Bank Group.
    5. Douglas H. Brooks & Eugenia C. Go, 2013. "Infrastructure," Chapters, in: Hal Hill & Maria Socorro Gochoco-Bautista (ed.), Asia Rising, chapter 3, pages 76-103, Edward Elgar Publishing.
    6. Straub, Stephane & Vellutini, Charles & Warlters, Michael, 2008. "Infrastructure and economic growth in East Asia," Policy Research Working Paper Series 4589, The World Bank.
    7. Ignas Lukosevicius, 2020. "European Union Transport Infrastructure: Roads and Railways Subsectors Case," Eurasian Journal of Business and Management, Eurasian Publications, vol. 8(4), pages 305-318.
    8. Shakil Ahmad & Muhammad Waqas Khan, 2021. "Investigating The Effect Of Foreign Direct Investment (Fdi) And Foreign Remittances On Economic Growth In Pakistan (1990-2018): A Time Series Analysis Using Ardl Model Approach," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(3), pages 8-16, September.
    9. Mary Modupe Fasoranti, 2012. "The Effect of Government Expenditure on Infrastructure on the Growth of the Nigerian Economy, 1977-2009," International Journal of Economics and Financial Issues, Econjournals, vol. 2(4), pages 513-518.

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    Keywords

    Transport Economics Policy&Planning; Governance Indicators; Banks&Banking Reform; Urban Slums Upgrading; Urban Services to the Poor;
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