Please use this identifier to cite or link to this item: https://hdl.handle.net/10356/157001
Title: A structural estimation of the return to infrastructure investment in China
Authors: Wu, Laura Guiying
Feng, Qu
Wang, Zhifeng
Keywords: Social sciences::Economic development
Issue Date: 2021
Source: Wu, L. G., Feng, Q. & Wang, Z. (2021). A structural estimation of the return to infrastructure investment in China. Journal of Development Economics, 152, 102672-. https://dx.doi.org/10.1016/j.jdeveco.2021.102672
Project: M4011642
Journal: Journal of Development Economics
Abstract: The productivity effect of infrastructure investment is controversial in the traditional literature using aggregate production function estimation due to reverse causality. This paper develops a new approach, using a structural model of firm-level production function, and matching Chinese firm-level production data with province-level infrastructure data. The estimated rates of return are about 6 percent averaged from 1999 to 2007. The returns triple if national-level spillover effects are taken into account. Controlling for the demand effect of public expenditure leads to smaller but still positive returns. The effect of infrastructure investment on firm-level productivity is heterogenous. With an increase in infrastructure investment, lower productivity firms are more likely to exit and higher productivity firms gain more market share.
URI: https://hdl.handle.net/10356/157001
ISSN: 0304-3878
DOI: 10.1016/j.jdeveco.2021.102672
Rights: © 2021 Elsevier B.V. All rights reserved. This paper was published in Journal of Development Economics and is made available with permission of Elsevier B.V.
Fulltext Permission: embargo_20241007
Fulltext Availability: With Fulltext
Appears in Collections:SSS Journal Articles

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