Working Paper: CEPR ID: DP8874
Authors: Abhijit Banerjee; Esther Duflo; Nancy Qian
Abstract: This paper estimates the effect of access to transportation networks on regional economic outcomes in China over a twenty-period of rapid income growth. It addresses the problem of the endogenous placement of networks by exploiting the fact that these networks tend to connect historical cities. Our results show that proximity to transportation networks have a moderate positive causal effect on per capita GDP levels across sectors, but no effect on per capita GDP growth. We provide a simple theoretical framework with empirically testable predictions to interpret our results. We argue that our results are consistent with factor mobility playing an important role in determining the economic benefits of infrastructure development.
Keywords: firms; growth; inequality; infrastructure
JEL Codes: D2; O4; R4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Proximity to transportation lines (L91) | per capita GDP levels (P24) |
| Proximity to transportation lines (L91) | per capita GDP growth rates (O49) |