How Much Does Physical Infrastructure Contribute to Economic Growth? An Empirical Analysis
Existing literature on the relationship between infrastructure and economic growth is inconclusive. This study evaluates the contributions to economic growth of three main categories of infrastructure—transport, electricity, and teleco...
| Main Authors: | , , |
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| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/undefined/553061639760111979/How-Much-Does-Physical-Infrastructure-Contribute-to-Economic-Growth-An-Empirical-Analysis http://hdl.handle.net/10986/36780 |
| Summary: | Existing literature on the
relationship between infrastructure and economic growth is
inconclusive. This study evaluates the contributions to
economic growth of three main categories of
infrastructure—transport, electricity, and
telecommunications—using data from 87 countries over
1992–2017. Compared with existing studies, this study uses
more recent data, includes new types of infrastructure such
as mobile phones, and provides separate estimates for
developing and developed countries. The pooled mean group
estimator, which tests for the weak exogeneity of the
infrastructure variables, is employed. The key finding of
the study is that an increase in infrastructure, especially
electricity generation capacity and telecommunications, has
significant positive effects on gross domestic product.
Infrastructure has a larger effect in more recent years
(1992–2017) than in earlier years (1970–1991), and the
effects of infrastructure are higher in developing economies
than in industrialized economies. |
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