Working Paper: CEPR ID: DP14818
Authors: Richard Bluhm; Axel Dreher; Andreas Fuchs; Brad Parks; Austin Strange; Michael J. Tierney
Abstract: This paper studies the causal effect of transport infrastructure on the spatial concentration of economic activity. Leveraging a new global dataset of geo-located Chinese government-financed projects over the period from 2000 to 2014 together with measures of spatial inequality based on remotely-sensed data, we analyze the effects of transport projects on the spatial distribution of economic activity within and between regions in a large number of developing countries. We find that Chinese-financed transportation projects reduce spatial concentration within but not between regions. In line with land use theory, we document a range of results which are consistent with a relocation of activity from city centers to their immediate periphery. Transport projects decentralize activity particularly stronglyin regions that are more urbanized, located closer to the coast, and less developed.
Keywords: transport costs; infrastructure; development finance; foreign aid; spatial concentration; China
JEL Codes: F15; F35; R11; R12; P33; O18; O19
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| spatial concentration of economic activity (R12) | economic inequality between different regions (R11) |
| Chinese government-financed transport infrastructure (R42) | spatial concentration of economic activity (R12) |
| Chinese government-financed transport infrastructure (R42) | Gini coefficient (D31) |
| Chinese government-financed transport infrastructure (R42) | decentralization of economic activity (R11) |