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Large scale infrastructure investment and economic performance – a case study of Oresund
Abstract
We analyse the effect of a large scale infrastructure investment, namely the construction of the Oresund bridge, on the local and supra-regional economy. We employ the synthetic control method to construct counterfactual regions that mimic the trajectory of Malmo and Southern Sweden without treatment. Our results point to a positive effect. However, placebo tests in space and time only reveal statistical significance at a larger regional level. The results suggest that spillover effects are eminent.
... The assessment of the effect of construction industry on economic activity has been analyzed in several investigations: Syed-Zakaria and Amtered-El-Abidi (2020), Asomanin-Anaman and Osei-Amponsah (2007), Wigren and Wilhelmsson (2007), Ali-Khan et al. (2014), Song and Geenhuizen (2014), Ahmadi and Shahandashti (2017), Olanrewaju et al. (2018), Achten et al. (2018), Lopes et al. (2010), and many others. In particular, Syed-Zakaria and Amtered-El-Abidi (2020) highlight that the Malaysian government has been encouraging Industrialized Building System (IBS) adoption as a modern method of construction to improve the precision of material and workmanship in order to increase economic growth. ...
... Large-scale infrastructure is a fundamental element of urban and regional systems. There is a positive correlation between the development of physical infrastructure and the socioeconomic growth of cities and regions (Achten et al. 2019). On the one hand, the term large-scale infrastructure means that infrastructure occupies a large space in terms of form and scale; on the other hand, it means that the influence of infrastructure often extends beyond a single city and region (Lopez-Sanchez et al. 2020). ...
Large-scale infrastructure operates in a complex and uncertain environment. When an unexpected safety accident occurs, efficient emergency decision-making plays a crucial role in safe operation. Case-based reasoning (CBR) provides an effective tool in emergency response decision-making. However, case retrieval efficiency and missing values for case attributes present significant challenges to CBR. Firstly, in this study, a unified framework representation method is constructed for accident cases of large-scale infrastructure. Secondly , an inductive indexing approach is used to preclassify cases according to key attributes of the cases in order to improve retrieval efficiency. Thirdly, this study proposes a two-layer integrated structure and attributes similarity algorithm based on the K-nearest neighbors (KNN) method in a bid to overcome the missing attribute values of the cases. Fourthly, the emergency decision-making system is developed for the large-scale infrastructure. Finally, a case study of the South-to-North Water Diversion Project in China is undertaken to verify the proposed methods and computing system. This study provides a valuable decision-making approach for operational safety-related emergency management of large-scale infrastructure.
... As the construction of large-scale bridges enters a golden age, numerous long-span bridges have been built worldwide [4] . Several studies have considered the aerodynamic performance of a sedan on a bridge under crosswinds, especially the transient aerodynamic performance and driving safety of a sedan passing through the wake of the bridge pylon. ...
In the crosswind environment, the flow field around a bridge pylon is complex and variable so that the vehicles are prone to side slip when passing by this region. In this situation, safety and comfort are severely affected. In this study, a dynamic coupling method that uses computational fluid dynamics (CFD) coupled with multibody dynamics was adopted to investigate the aerodynamic performance and dynamic response of a sedan passing by a bridge pylon in a crosswind. The overlapping grid technique was used to achieve the movement of the sedan in the CFD simulation. The mechanism of the interaction between the flow field around the sedan and the wake vortex around the bridge pylon was demonstrated. The influence of crosswind type on the aerodynamic performance and dynamic response was further studied. The results show that the flow field around the sedan could greatly influence the behavior of the sedan, mainly in terms of changes in lateral displacement and yaw angle. Additionally, the dynamic coupling method provides a more direct and realistic way to understand the interaction between the aerodynamic loads and the dynamic responses. Of the different wind types considered (sinusoidal, linear, step), the step crosswind produces the biggest average lateral force and yaw moment resulting in the largest lateral displacement and yaw angle.
... A considerable contribution to the development of the theory of risks was made by the famous economist or classics of the economic though: (Abdel-Basset et al., 2019;Das et al., 2019;Dirick et al., 2019;King et al., 2018;Novo-Corti et al., 2019;Santis, 2018;Souza et al., 2019). The problem of risks of the realization of large scale investment projects as a tool of the infrastructural development of territories (such as, for instance, La Manche tunnel, Øresund Bridge between Denmark and Sweden, Vasco da Gama bridge in Portugal and others) was thoroughly studied in the works of the scientists: (Achten et al., 2019;Bayrak, 2018;Bogoviz & Sergi, 2018;Brazill-Boast et al., 2018;Fragkos& Kouvaritakis, 2018;Genoud, 2018;Moreda, 2018;Morozova et al., 2018;Osabuohien et al., 2019;Popkova, 2019); Sergi et al., 2019;Zheng et al., 2019). The problems of risks identification, practical aspects of their realization in historic and current territorial megaprojects and methodological aspects of the assessment and leveling of the risks at different stages of the life cycle of a large scale investment project were studied in the works of the scientists: (Bi & Cai, 2019); Bo et al., 2019;Clark, 2019;Díaz et al., 2019;D'Orazio & Popoyan, 2019;Huang, 2019;Huber & Huber, 2019;Wan et al., 2019;Zhang & Chen, 2019). ...
Using the concepts of poverty trap and neighbouring effect, this paper explores whether the economies of low-income regions and high-income regions respond differently to national economic fluctuations. It identifies an asymmetric pattern of regional income change in low-income regions of Korea due to a relatively small population size and weak urbanization economies. These low-income regions could increase their income levels by 3.75% if they succeeded in developing a symmetric relation to national economic fluctuations. Spatial proximity between high- and low-income regions can generate greater backwash (negative) effects on the economic growth of low-income regions than spread (positive) effects.
Investments in transport infrastructure have been widely used by decision makers to encourage economic growth, particularly during periods of economic downturn. There has been extensive research on the linkage between transport infrastructure and economic performance since the late 1980s, characterised by widely varying evidence. We conduct a meta-analysis of the empirical evidence on the output elasticity of transport infrastructure, based on a sample of 563 estimates obtained from 33 studies. Previous meta-analyses have focused on total public capital and hence cannot appropriately explain the wide variation in the productivity effect of transport infrastructure nor provide guidance to policymakers on the returns to investment in different types of transport infrastructure. Our results indicate that the existing estimates of the productivity effect of transport infrastructure can vary across main industry groups, tend to be higher for the US economy than for European countries, and are higher for roads compared to other modes of transport. The variation in the estimates of the output elasticity of transport is also explained by differences in the methods and data used in previous studies. Failing to control for unobserved heterogeneity and spurious associations tends to result in higher values, while failing to control for urbanisation and congestion levels leads to omitted variable bias. These findings can be used to inform future research on the choice of model specification and estimation and transport-related policy making.
Purpose: To present a comprehensive discussion of the empirical research on the impact of public investment in infrastructure on economic performance in terms of the methodological approaches and respective conclusions. Design/methodology/approach: The paper includes an integrated discussion of the methodological developments that successively have led to the estimation of production functions, cost and profit functions and, more recently, vector autoregressive models. Findings: The paper reveals some important areas for future research and highlights the natural convergence of this literature with the macro literature on the effects of fiscal policies. Originality/value: This paper is an up-to-date survey of the most important literature on the effects of public investment on economic performance and therefore constitutes an essential starting reference for academic researchers and policy makers alike. Paper type: Literature review.
We test for an effect of Arizona's 2007 Legal Arizona Workers Act (LAWA) on the proportion of the state population characterized as foreign-born, as non-citizen, and as non-citizen Hispanic. We use the synthetic control method to select a group of states against which the population trends of Arizona can be compared. We document a notable and statistically significant reduction in the proportion of the Arizona population that is foreign-born and in particular, that is Hispanic noncitizen. The decline observed for Arizona matches the timing of LAWA's implementation, deviates from the time series for the chosen synthetic control group, and stands out relative to the distribution of placebo estimates for the remainder of states in the nation. Furthermore, we do not observe similar declines for Hispanic naturalized citizens, a group not targeted by the legislation. Our results on LAWA's impact on the housing market provide further support for our findings.
Building on an idea in Abadie and Gardeazabal (2003), this article investigates the application of synthetic control methods to comparative case studies. We discuss the advantages of these methods and apply them to study the effects of Proposition 99, a large-scale tobacco control program that California implemented in 1988. We demonstrate that following Proposition 99 tobacco consumption fell markedly in California relative to a comparable synthetic control region. We estimate that by the year 2000 annual per-capita cigarette sales in California were about 26 packs lower than what they would have been in the absence of Proposition 99. Given that many policy interventions and events of interest in social sciences take place at an aggregate level (countries, regions, cities, etc.) and affect a small number of aggregate units, the potential applicability of synthetic control methods to comparative case studies is very large, especially in situations where traditional regression methods are not appropriate. The methods proposed in this article produce informative inference regardless of the number of available comparison units, the number of available time periods, and whether the data are individual (micro) or aggregate (macro). Software to compute the estimators proposed in this article is available at the authors' web-pages.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
We develop a statistical framework to use satellite data on night lights to augment official income growth measures. For countries with poor national income accounts, the optimal estimate of growth is a composite with roughly equal weights on conventionally measured growth and growth predicted from lights. Our estimates differ from official data by up to three percentage points annually. Using lights, empirical analyses of growth need no longer use countries as the unit of analysis; we can measure growth for sub- and supranational regions. We show, for example, that coastal areas in sub-Saharan Africa are growing slower than the hinterland. (JEL E01, E23, O11, 047, 057)
The relationship between the quality of political institutions and the performance of regulation has recently assumed greater prominence in the policy debate on the effectiveness of infrastructure industry reforms. Taking the view that political accountability is a key factor linking political and regulatory structures and processes, this article empirically investigates its impact on the performance of regulation in telecommunications in time-series--cross-sectional data sets for 29 developing countries and 23 developed countries during 1985--99. In addition to confirming some well-documented results on the positive role of regulatory governance in infrastructure industries, the article provides empirical evidence on the impact of the quality of political institutions and their modes of functioning on regulatory performance. The analysis finds that the impact of political accountability on the performance of regulation is stronger in developing countries. An important policy implication is that future reforms in these countries should give due attention to the development of politically accountable systems. Copyright The Author 2009. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank. All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.
Over the past few decades, policy makers have considered employer mandates as a strategy for stemming the tide of declining health insurance coverage. In this paper we examine the long term effects of the only employer health insurance mandate that has ever been enforced in the United States, Hawaii's Prepaid Health Care Act, using a standard supply-demand framework and Current Population Survey data covering the years 1979 to 2005. During this period, the coverage gap between Hawaii and other states increased, as did real health insurance costs, implying a rising burden of the mandate on Hawaii's employers. We use a variant of the traditional permutation (placebo) test across all states to examine the magnitude and statistical properties of these growing coverage differences and their impacts on labor market outcomes, conditional on an extensive set of covariates. As expected, the coverage gap is larger for workers who tend to have low rates of coverage in the voluntary market (primarily those with lower skills). We also find that relative wages fell in Hawaii over time, but the estimates are statistically insignificant. By contrast, a parallel analysis of workers employed fewer than 20 hours per week indicates that the law significantly increased employers' reliance on such workers in order to reduce the burden of the mandate. We find no evidence suggesting that the law reduced employment probabilities.
This paper provides a new dataset of regional income inequalities within countries based on satellite nighttime light data. First, we empirically study the relationship between luminosity data and regional incomes for those countries for which regional income data are available. Second, we use our estimation results for an out-of-sample prediction of regional incomes based on the luminosity data. These results enable us to investigate regional income differentials in developing countries that lack official income data. Third, we calculate commonly used measures of regional inequality within countries based on predicted incomes. An investigation of changes in the dispersion of regional incomes over time reveals that approximately 67-70% of all countries experience sigma-convergence. Forth, we study different major determinants of within-country changes in inequality, i.e., the determinants of the convergence process. We find evidence for an N-shaped relationship between development and regional inequality. Resources, mobility, trade openness, aid, federalism and human capital are also very important.
Regional economic impacts of shale oil and gas activities are estimated for shale plays in Arkansas, North Dakota and Pennsylvania.•The Synthetic Control Method is used to estimate the economic impacts in each state. The Synthetic Control Method has a number of advantages over other approaches in this setting.•The overall finding is that the estimated impacts are much smaller than those predicted by regional input-output models, where for some areas no significant impacts are detected.•State and local policy makers should consider both the potential positive and negative effects so as to maximize the social welfare of area residents.
I examine the post-war economic development of two regions in southern Italy exposed to mafia activity after the 1970s and apply synthetic control methods to estimate their counterfactual economic performance in the absence of organized crime. The synthetic control is a weighted average of other regions less affected by mafia activity that mimics the economic structure and outcomes of the regions of interest several years before the advent of organized crime. The comparison of actual and counterfactual development shows that the presence of mafia lowers the growth path, at the same time as murders increase sharply relative to the synthetic control. Evidence from electricity consumption and growth accounting suggest that lower GDP reflects a net loss of economic activity, due to the substitution of private capital with less productive public investment, rather than a mere reallocation from the official to the unofficial sector.
The impact of transport infrastructures on the economic growth of both regions and sectors, distinguishing among modes of transport, is analysed. An attempt is also made to capture the spillover effects associated with transport infrastructures. Two different methodologies are used: the first adopts an accounting approach based on a regression on indices of total factor productivity; the second uses econometric estimates of the production function. Very similar elasticities are obtained with both methodologies for the private sector of the economy, both for the aggregate capital stock of transport infrastructures and for the various types of infrastructure. However, the disaggregated results for sectors of production are not conclusive. The results confirm the existence of very substantial spillover effects associated with transport infrastructures.
A major question in Economic Geography relates to the scale and nature of transport infrastructure’s contribution to the broader economy. While Cost-Benefit Analysis (CBA) is the most widely used of the three potential approaches, the recent interest in the wider economic benefits of transport infrastructure has spawned a variety of macroeconomic models. However, the estimates of magnitudes and direction of economic impacts of infrastructure by various macroeconomic models are sharply different, and these models shed little light on causal mechanisms linking transport and the economy. This paper has two aims: first, to highlight the wider economic benefits of transport infrastructure from the observed role of railroads and waterways in economic development, and two by reviewing recent theoretical developments to identify the multiple causal mechanisms which link transport and economic growth such as : market expansion, gains from trade, technological shifts, processes of spatial agglomeration and processes of innovation and commercialization of new knowledge in urban clusters (made possible by transport improvements). Hence the need for developing general equilibrium analyses of transport-economy linkages.
This paper considers the relationship between aggregate productivity and stock and flow government-spending variables. The empirical results indicate that (i) the nonmilitary public capital stock is dramatically more important in determining productivity than is either the flow of nonmilitary or military spending, (ii) military capital bears little relation to productivity, and (iii) a ‘core’ infrastructure of streets, highways, airports, mass transit, sewers, water systems, etc. has most explanatory power for productivity. The paper also suggests an important role for the net public capital stock in the ‘productivity slowdown’ of the last fifteen years.
Maybe because of the inconclusive nature of the results on the impact of public capital on output at the regional level, the issue of the possible existence of the regional spillovers from public capital formation has received little attention. The objective of this paper is to provide evidence on the possible existence of such spillovers. We consider the case of Spain and its seventeen regions. Our methodological approach consists in estimating an aggregate VAR model for Spain as well as seventeen region-specific VAR models in which both capital installed in the region and capital installed outside the region are allowed to play a role in enhancing regional output. The estimation results can be summarized as follows. The aggregate effects of public capital formation in Spain are important. They cannot, however, be captured in their entirety by the direct effects in each region from public capital installed in the region itself. When for each region both the capital installed in the region and the capital installed outside the region are considered the total disaggregated effect from the seventeen regional models are very much in line with the aggregate results. Furthermore, the aggregate effect seems to be due in almost equal parts to the direct and spillover effects of public capital formation. Ultimately, this paper establishes the relevance of both capital installed in each region and spillover effects in the understanding of the regional decomposition of the aggregate effects of public capital formation. In doing so it opens the door to some tantalizing and potentially highly charged research issues in terms of the determination of the optimal location of public investment projects.
For 98 countries in the period 1960–1985, the growth rate of real per capita GDP is positively related to initial human capital
(proxied by 1960 school-enrollment rates) and negatively related to the initial (1960) level of real per capita GDP. Countries
with higher human capital also have lower fertility rates and higher ratios of physical investment to GDP. Growth is inversely
related to the share of government consumption in GDP, but insignificantly related to the share of public investment. Growth
rates are positively related to measures of political stability and inversely related to a proxy for market distortions.
The empirical results reported in this paper suggest that only about 20% of the aggregate effects of public investment in highways in the US are captured by the direct effects on each state output of public investment in the state itself. The remaining 80% correspond to the spillover effects from public investment in highways in other states. This result may provide an answer to the paradox in the literature that the findings of large effects at the aggregate level have not been matched at the regional level. This is because regional analysis has typically ignored the possible existence of spillover effects.
This article investigates the economic effects of conflict, using the terrorist conflict in the Basque Country as a case study. We find that, after the outbreak of terrorism in the late 1960's, per capita GDP in the Basque Country declined about 10 percentage points relative to a synthetic control region without terrorism. In addition, we use the 1998-1999 truce as a natural experiment. We find that stocks of firms with a significant part of their business in the Basque Country showed a positive relative performance when truce became credible, and a negative relative performance at the end of the cease-fire.
This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection as well as empirical evidence on the effects of patent rights. Then, the second part considers the international aspects of IPR protection. In summary, this paper draws the following conclusions from the literature. Firstly, different patent policy instruments have different effects on R&D and growth. Secondly, there is empirical evidence supporting a positive relationship between IPR protection and innovation, but the evidence is stronger for developed countries than for developing countries. Thirdly, the optimal level of IPR protection should tradeoff the social benefits of enhanced innovation against the social costs of multiple distortions and income inequality. Finally, in an open economy, achieving the globally optimal level of protection requires an international coordination (rather than the harmonization) of IPR protection.
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