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Causality between transportation infrastructure and economic development in Pakistan: An ARDL analysis

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Abstract

This paper examines the relationship between transport infrastructure and economic development in Pakistan. An autoregressive distributive lag (ARDL) and vector error correction model (VECM) is applied over the period 1971-2017. The results indicate that there is a long-run and causal relationship between transport infrastructure and economic development. Transport infrastructure has long-run positive impact on economic development. Furthermore, Granger causality test shows a unidirectional causality in long-run running from transport infrastructure to economic development. Interestingly, the impact of air infrastructure on economic development is statistically insignificant in long-run and short-run. The new results from this research provides a comprehensive picture of determinants of economic development from transport infrastructure in Pakistan and these new findings not only help policy makers but also can help to advance the current literature. Therefore, it is suggested that the government of Pakistan should concentrate more to increase the transport infrastructure for higher economic development.

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... To develop a viable policy for investing in road transport infrastructures and fostering regional development, it is essential to ascertain the causal relationship between economic growth and transportation (Zhang and Graham 2020). Relying solely on theory is inadequate to establish this relationship, so the use of empirical evidence specific to a region is necessary to discern the underlying causality between the parameters (Alam et al. 2021). Although the existing research findings provide insightful information about the connection between infrastructure and economic growth in various other countries, no specific study has so far been performed in Nepal to explore this relationship. ...
... Nonetheless, discussions revolve around the link between transportation and economic development, questioning whether one enhances the other, if it is the other way around, or if they mutually reinforce each other (Maparu and Mazumder 2017;Beyzatlar et al. 2014). Numerous studies have been conducted to determine the relationship between transportation and economic growth (Alam et al. 2021). An investigation by Njoku et al. (2015) shows that the economic development of Nigeria is positively influenced by the investment in transport sector. ...
... This concept was further explored and expanded upon by (Johansen 1988;Engle and Granger 1987;Engle and Yoo 1987;Johansen 1991Johansen , 1995Phillips 1986Phillips , 1987Phillips and Ouliaris 1990;Stock and Watson 1988). The underlying idea behind cointegration is that although the variables may have correct short-term disruption, they have a long-term relationship among them (Alam et al. 2021). The absence of cointegration means there is no long-term equilibrium link between these variables and that they might diverge arbitrarily from one another. ...
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Sustained efforts and investments in different sectors are essential for the overall development of a region. Various studies around the globe underscore the importance of investment in road transport infrastructure in many developing countries to achieve their development targets. The relationship between infrastructure investment and economic growth is often found to be inconsistent. This ambiguity leads to a lack of consensus on an appropriate scale of investment required among the policy makers. So, it is often necessary to depend on empirical evidence by developing causality direction, which significantly contributes to policy implications in developing countries. The objective of this analytical study is developing a relationship between the road transport infrastructure and economic growth of Nepal. For this, relevant data from 1998 to 2022 were used to perform a unit root test and determine the order of integration, followed by cointegration analysis to determine the long-run relationship between the variables. In addition, the vector error correction model (VECM) was employed to find the direction of causality. The findings indicate unidirectional long-run causality from gross capital formation, exports of goods and services, expenditure on road transport infrastructures, and road length to the GDP of Nepal. Furthermore, the expenditure on road transport infrastructures is observed to have a short-run impact on economic growth. This study recommends that a suitable transportation policy should be implemented to boost investment on road transport infrastructures to achieve sustainable economic growth in Nepal-like developing nations.
... First, current literature mostly emphasizes transport and logistics infrastructure. Notably, most logistics industry components-the modern logistics industry [1], reference [12]-are ignored when simultaneously estimating their short-and long-run effects besides testing the given propositions on the projected coefficients in the long-run. This interpretation and implementation of most logistics industry components need to apply in an appealing, straightforward way [13] and require a single-form equation [14], while existing studies applied procedures in a system of equations. ...
... In a concise statement, these studies have numerous shortcomings concerning relationships between the logistics-industry, economic development, and CO 2 emissions. First, current research works mostly emphasize transport and logistics infrastructure while overlooking most components of logistics industry, i.e., the modern logistics industry [1,12], when simultaneously estimating their short-and long-run influence, besides testing the given suppositions on the projected coefficients in the long-run. Moreover, existing studies applied procedures in a system of equations, while this interpretation and implementation of most logistics industry components need to apply in an attractive, straightforward way [13] and require a single-form equation [14]. ...
... Air logistics (AirL) are represented by the total goods shipped by airplanes [37]. Port logistics (PortL) are analyzed by the total cargo operated at the port-side [12]. Economic prosperity is measured in gross domestic product and represented by EP [38]. ...
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The modern logistics industry in relation to economic growth and carbon emission has opened new strategic perspectives. Recent research work have analyzed such complex interference from a broad perspective. However, analyzing this overlap needs comprehensive insight into the logistics industry while simultaneously estimating its short-run and long-run effects from regional aspects due to continue-evolving factors and their impact on it. This paper competently analyzes logistics industry components in connection with economic prosperity, energy consumption, trade development, and carbon emission from a more specific regional perspective of a developing country. Methodologically, an autoregressive distributive lag model (ARDL) is employed using correlative evaluation of the dynamic factors and their interactive impact in short and long run on this relation, based on time-series data of Pakistan from 1990 to 2019. The study results endorse the previous studies’ outcomes by recognizing that an increase in carbon emission depends on trade development, energy usage, economic development, and the logistics industry’s various components except for air logistics. However, study results show a unidirectional long-run causality directing from economic development, logistics industry, energy utilization, and trade development to carbon emission. Moreover, these results reveal that this emission is the leading factor to introduce stringent emission standards that further overlap with regional demographics trends, i.e., carbon emission implications. These findings imply that economic development applies a substantial demand-pull impact on national logistics, i.e., regional economic development directs to the growth of the logistics industry in the corresponding region. Consequently, high-income geographical regions have higher long-run risk concerning contemporary developmental activities of the logistics industry when adhering to carbon emission standards. Particularly, the influence of upcoming emission standards must be prioritized when planning the future returns of contemporary research and development activities of the logistics industry in a given geographic area, such as CPEC. Given Pakistan’s perspective, the proposed empirical analysis can be exampled to other developing countries. This analysis may facilitate the design and development of strategies for upcoming financial funding in the modern logistics industry to seek its sustainable development-goals in developing economies.
... Therefore, the accessibility factor in the design of public transportation infrastructure is very important. In the long term, transportation infrastructure will increase economic development (Alam et al., 2021). Thus, transportation infrastructure is an important input for economic development, so the right transportation policy must be implemented to increase economic growth in the region. ...
... It is therefore recommended to develop more transport infrastructure in all sectors, such as roads (land), air, ports and crossing ports. The increase in the achievement of economic development through infrastructure is due to the direct and indirect benefits that are spread to the economy (Alam et al., 2021). ...
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This study aims to analyze connectivity or accessibility between regions in Wakatobi islands, both within and between islands, to understand the available transportation network. Based on an understanding of the dynamics of connectivity, it is expected to provide a solid foundation for the development of more efficient and sustainable transportation infrastructure in the future. A combination of qualitative and quantitative approaches is used to explore data more comprehensively and accurately. The two primary airports and several ports are still insufficient in enhancing connectivity for both the residents and tourists within the archipelago. Improving road, sea, and air transportation networks is a necessity and expectation to improve connectivity between regions. An analysis of accessibility potential provides an overview of transportation costs and expensive and long travel fares. There are several needs that need to be met in the form of the revitalization of local ports, the development of the concept of Air Buses between crossing ports, optimizing routes between airports, and the implementation of Bus/BRT (Bus Rapid Transit) on each island with feeder lines. Furthermore, the development of connectivity in Wakatobi must consider various alternative modes of transportation, increasing service frequencies, and developing supporting infrastructure. This conclusion is the basis for the preparation of a holistic and sustainable connectivity development plan in the Wakatobi archipelago.
... Following are the ECM equations (from Equations (9)-(13)) of this study with dummy variables [7]: [59] ARDL Cointegration Degong, Ullah [33] ARDL Cointegration Shah, Hasnat [20] ARDL Cointegration Motseta [60] ARDL Cointegration Alam, Li [61] ARDL/VECM Note. Researcher own compilation. ...
... These tests are also applied to check the overall model stability [66]. The estimated models (Table 10) are reliable and stable because the estimated line falls within the critical bounds at 5% of the level of significance of cumulative sum (CUSUM) and cumulative sum of squares (CUSUMSQ) [36,60,66,61]. The graphs of CUSUM and CUSUMSQ are given in Appendix as Figure B. Further, the results of Breusch-Godfrey Serial Correlation LM test for autocorrelation and Breusch-Pagan-Godfrey test for Heteroscedasticity [33] are also performed and overall models pass the diagnostic test as shown in Table 11. ...
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In an asymmetric information environment, investors diversify their investments to minimize risk and maximize their wealth. Such diversification ranges from one market to another market and from one country to another country. Investors prefer foreign portfolio investment over foreign direct investment because of the economy's turmoil, changes in macroeconomic indicators, and market liberation. This study analyzes the dynamic relationship among stock market volatility, foreign portfolio investment, and macroeconomic indicators (foreign exchange rate, interest rate, and Gross Domestic Product) using the dynamic long-run Auto-regressive Distributed Lag (ARDL) model concerning the Pakistan environment. This study also considers the impact of multiple structural breaks, representing variables' endogenous and exogenous shocks. The secondary data is used from Oct. 01, 2009, to Sept. 30, 2019, with monthly frequency. The results indicate a co-integration between SMV, FPI, FXR, IR, and GDP. In short-run analyses, the error correction term is statistically significant, while in the long run, the SMV, FPI, and FXR are not impacted. As no evidence of volatility has been found between SMV and FPI, unidirectional or bi-directional policies can be devised to further attract the new FPI for strengthening the foreign reserves, the balance of payments, and other macroeconomic variables. Additionally, investors should update their knowledge based on considering the endogenous and exogenous shocks on the SMV.
... Economic development is an important indicator for improving the people´s standard of living (Alam et al., 2020). Similarly, the development of the trade depends on how each country conducts its trade policy (specialization, main export and import markets, dependence on forms of financing, degree of internationalization of domestic firms, supply chain development, among others) (Allen & Giovannetti, 2011). ...
... The transportation infrastructure impact on the economy is seen in economic development and differs in developed and developing countries. Immediate benefits and sustainable growth occur over different time periods (Alam et al., 2020), (Esfahani & Ramírez, 2003) and (Short & Kopp, 2005). Arbués et al. (2015) when testing the existence of direct and indirect effects of road, rail, airport, and port infrastructure projects by estimating a production function noted that transportation infrastructure impacts the economy, not only of the region in which they are located, but also the economy of adjacent regions (spillovers effect). ...
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Purpose: The airport infrastructure plays capital importance in the development of national trade. It facilitates the flow of people, goods, and services more quickly. Thus, given its importance, this study seeks to analyze the impact of the Angolan investment in airport infrastructure between 2000 – 2020.Design/methodology/approach: this article presents the results of quantitative and qualitative research, based on narrative review and output of the Auto-Regressive Distributed Lag (ARDL) technique, which aimed to analyze the impact of investment in airport infrastructure on the growth of Angola GDP per capita.Findings: The results of the stationarity tests performed shows mixed integration in both I(0) and I(1), which justifies the used ARDL. Similarly, the bounds test showed that there is a very strong relationship between airport infrastructure investment and GDP per capita growth in the short and long run. However, in the Angola case study, the impact that exists is negative, meaning that airport infrastructure negatively impacts per capita GDP growth in both the short run and in the long run.Research limitations/implications: this research has been among the first to analyze the impact of investment in airport infrastructure on the growth of Angola GDP per capita. Besides the contribution of this research, some limitations are the difficulty to find data of investment and the literature about transportation infrastructure in Angola.Originality/value: the analyze of the impact of investment in airport infrastructure in the growth of Angola GDP per capita is a fundamental step that can help public and private entities in making decisions that aim to improve the management of the Angola transport infrastructure.
... Also, in Pakistan, Alam et al. (2020) employed the autoregressive distributed lag (ARDL) and vector error correction model (VECM) over the period 1971-2017 to examine the relationship between transport infrastructure and economic development. The study finds that that transport infrastructure had a long-run positive impact on economic growth. ...
... Also, in the short run, the study finds that 1% increase railway lines increases economic growth by 0.084% in the U.S. The long run and short run results in this study are supported by the findings from variance decomposition (Figure 3) results which shows a significant contribution of railway lines to economic growth overtime. More so, this positive and significant effect of railway lines on economic growth is consistent with the study of Alam et al. (2020) who also found a positive effect of transportation infrastructure on economic growth in Pakistan. More so, the findings of this study are consistent with a number of cross-country studies. ...
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The $20.81 trillion U.S. economy relies on a vast infrastructure network to thrive; however, empirical studies that examined that impact of infrastructure on economic growth in the U.S. are limited. This study’s principal objective was to examine the effect of railway lines on economic growth using annual data from 1980 to 2016 and cointegration analysis. The results showed a positive and significant impact of railway lines on economic growth in the long-run and short-run. The impulse response analysis indicates that shocks to railway lines initially cause GDP growth rates to increase and decrease continuously. The variance decomposition analysis also suggests that overtime, railway lines contribute largely to the variations in economic growth followed by inflation and population. This study’s outcome has important implications not only for the U.S. economy but also for developing and emerging countries. The results suggest that railway lines investments matter for economic growth in the U.S.
... In this study, a Granger causality test is used to observe and report the causal connection between different selected variables. Earlier studies by Alam et al. (2021) and Pradhan et al. (2022) also utilised this approach to capture the causal linkages among different variables. ...
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The purpose of this study is to examine the impact of industrialisation on sustainable development in developing Asian and European nations between 1990 and 2022. To accomplish this, the study employed a panel dataset and a variety of econometric models, including panel unit root, cointegration, and an autoregressive distributed lag (ARDL) model, to estimate the short-run and long-run dynamics between the variables. Moreover, the dynamic least squares (DOLS) model is used for confirming the robustness of the study’s findings. The cointegration result verifies that there is one-way cointegration between the concerned variables. The Panel ARDL's findings reveal that industrialisation has a long-run positive influence on sustainable development (as expressed by SDI) in developing nations in both Asia and Europe. However, compared to developing nations in Europe, industrialisation has a greater influence on sustainable development in Asian developing nations. However, industrialisation has a short-term detrimental impact on sustainable development in developing nations in both Asia and Europe. Therefore, the present study's statistical findings support the incidence of the Environmental Kuznets Curve (EKC) hypothesis in developing Asian and European nations, highlighting the idea that industrialisation initially undermines sustainability (especially environmental sustainability) but eventually promotes sustainable development. These results offer compelling evidence that, on the long-term horizon, one of the major driving forces ensuring sustainable development in developing Asian and European countries is industrialisation.
... On the other hand, trade frictions have prompted China to strengthen its agricultural cooperation with "the Belt and Road" countries, increasing the correlation of agricultural product prices between them, and significantly promoting the level of regional cooperation with Europe. Furthermore, with the advancement of trade liberalization, the impact of transportation infrastructure on national trade becomes more and more evident, and the economic development of countries increasingly depends on infrastructure [3]. ...
... A literatura existente tem apontado a relação significativa existente entre a eficiência da infraestrutura logística e de transporte e o PIB das nações (e.g. SÉNQUIZ-DÍAZ, 2006;WANG et al., 2021;ALAM et al., 2021;CHEN e LI, 2021;LUZ, ALENCAR et al., 2016, MAGAZZINO et al., 2021, JAYATHILAKA et al., 2022. No A literatura existente (e.g. ...
Article
A logística internacional desempenha um papel fundamental no comércio mundial e no desenvolvimento econômico das nações. O Índice de Desempenho Logístico (LPI) e o Produto Interno Bruto (PIB) atuam como medidas aceitáveis para identificar tendências emergentes e o status da economia de uma nação. Assim, este artigo tem como objetivo realizar um estudo introdutório sobre a relação entre desempenho logístico, extensão territorial e PIB per capita das nações, a fim de compreender suas implicações prático-teóricas. A metodologia aplicada adotada como procedimento de pesquisa foi um estudo de caso baseado nos dados de desempenho logístico, extensão territorial e PIB per capita das nações a partir de relatórios do Banco Mundial e realização de análises estatísticas para verificar correlação estatística entre esses fatores. Evidenciou-se que não há uma correlação direta entre a extensão territorial das nações e seus desempenhos logísticos, mas que há correlação entre o LPI e o PIB per capita das nações. O valor e originalidade do trabalho reside na análise usando ferramentas estatísticas em torno da possível correlação entre a dimensão “desempenho logístico” e dimensões externas, fato esse até então pouco explorado pela literatura acadêmica.
... In Europe, Revoltella, Scarpetta & Vanhala (2016) emphasized infrastructure's role in linking local businesses with global growth opportunities, particularly during economic downturns. Alam, Li, Baig, Ghanem & Hanif (2020) explored the transport infrastructure-economic development relationship in Pakistan, revealing a long-run and causal connection. Cantos, Gumbau-Albert, and Maudos (2005) examined transport infrastructure's impact on regional growth in Spain, highlighting significant spillover effects. ...
Article
Studies frequently explored the relationship between economic performance and transport investments. However, how the performance of the economy relates to the usage of transport in Africa and Nigeria in particular is poorly explored prompting investigation on the nexus between railway passenger travel and economic development in Nigeria. The study employed the Vector Auto-Regressive (VAR) Model to analyse the 60-year annual time series data of railway passenger movement, annual GDP, and inflation. Results indicate about 72.5% of the variables entered in the model accounted for 72.5% of changes observed in railway passenger traffic with Lag 1 of passenger travel exerting the most substantial influence on the output. The result further shows Inflation and GDP (x= 0.485223; P= 0.7846.) as well as their lags are redundant in forecasting the 60-year data. The study concludes that economic performance does not influence travel by railways among passengers using railways in Nigeria. Keywords: Economic performance, Railway, Passenger travel, Transportation system
... On the one hand, the large-scale increase in transportation land consumes substantial land resources, resulting in the fragmentation of land use and negative ecological impacts [6]. On the other hand, the investment required for transportation construction is substantial, but the economic returns are slow [7]. Low utilization rates of transportation facilities not only lead to the significant waste of land resources but also increase the financial burden on cities [8]. ...
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The imbalance between the population, transportation, and construction is an important factor affecting coordinated regional development in China. Using transportation land area and population data from 2010, 2015, and 2020 in 121 counties (cities and districts) of Guangdong Province, this study analyzes the spatiotemporal changes in transportation land and population structure. It explores the relationship between transportation land and population size changes using exploratory spatial data analysis (ESDA) and decoupling models. Research suggests the following: (1) From 2010 to 2020, the per capita transportation land in various districts and counties of Guangdong Province showed a hierarchical structure of “low center and high periphery”. Conversely, the proportion of transportation land to construction land displayed a “high center and low periphery” characteristic. (2) During the same period, the total amount of transportation land in the peripheral areas of the Pearl River Delta was higher than that in the PRD (the Pearl River Delta) and the gap widened each year. Meanwhile, the proportion of transportation land to construction land in the peripheral areas of the Pearl River Delta was consistently higher than that in the PRD. (3) From 2010 to 2015, the relationship between population growth and transportation land in Guangdong Province showed a hierarchical pattern, while from 2015 to 2020, the pattern became more complex, and regional imbalance intensified. The decoupling results of PRD showed weak decoupling and expanding negative decoupling from 2010 to 2020. The peripheral areas of the Pearl River Delta are characterized by strong negative decoupling and expanding negative decoupling. Research has shown that although Guangdong Province is one of the most developed provinces in China, the mismatch between transportation land and population size in economically underdeveloped areas has become increasingly severe, with changes in the provincial population distribution pattern. The decoupling phenomenon between the transportation land and population is very obvious, and the policy of achieving regional balanced development through transportation infrastructure construction needs to be reviewed.
... El desarrollo socioeconómico es la actividad en la que los componentes sociales y económicos se convierten en crecimiento económico y social, y es medible en ambos (Sandoval & Hernández, 2018). La infraestructura del transporte se relaciona con el desarrollo económico, brindando un impulso económico a corto y largo plazo (Mehmood et al., 2021). Esto indica que la infraestructura vial es esencial para erradicar el hambre, aplacar la pobreza y optimizar la calidad de vida de los seres humanos en las zonas rurales (Okwudile, 2019). ...
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La investigación se enfoca en determinar la relación existente entre la Gestión Vial Rural (GVR) y el desarrollo socioeconómico en un distrito de la provincia de San Ignacio, Perú. Se trabaja un enfoque cuantitativo, de tipo básico, diseño no experimental y correlación simple. La muestra estuvo conformada por 52 colaboradores de la entidad municipal, utilizando como técnica la encuesta para recopilar la información. El 75% de los encuestados considera que el nivel de la GVR es alto, mientras que el 71.2% considera el desarrollo socioeconómico de nivel medio. Además, las variables GVR y desarrollo socioeconómico tienen correlación positiva alta, siendo su coeficiente Rho Spearman de 0.783 y nivel significancia bilateral de 0.000, con un p valor debajo de 0.05. Esto implica que al haber mayor GVR el desarrollo socioeconómico también será mayor, lo cual se identificó en el análisis del contexto y la caracterización de la situación problemática.
... The findings of the paper indicate that the development of infrastructure played a crucial role in fostering economic growth within Eastern African countries. Alam et al. (2021) employed an autoregressive distributed lag (ARDL) and a vector error correction model (VECM) to analyze economic growth and transport infrastructure in Pakistan from 1971-2017. According to the findings, transport infrastructure directly contributes to economic growth over the long term. ...
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For the purpose of this paper, we examine the association between foreign direct investment, openness to trade, infrastructure, innovation, and economic development in 10 members of the Commonwealth Independent States between 2000 and 2020 using a panel Autoregressive Distributed Lag model. According to the results, none of the elements that are researched for this paper has a statistically significant influence on economic growth over the short term. On the other hand, in the long run, each of the variables, including foreign direct investment, infrastructure, innovation, and trade openness, has a statistically favorable and substantial impact on economic growth; furthermore, the findings are in line with the findings of the baseline static panel data models.
... The CPEC road and rail projects were jointly begun by China and Pakistan to build an intermodal transport system, and China uses Pakistan as a land bridge to ship its goods to the Middle East and Europe. Land connections were emphasised by [17][18][19] as a means of diverting freight away from main thoroughfares. The importance of intermodal transport service in reducing freight transportation costs, reducing transit times, and shortening routes was also discussed in this research. ...
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This research examines the potential impact of the China-Pakistan Economic Corridor (CPEC) on the selection of trading routes between China, the Middle East, and Europe, with a specific focus on the transportation of a 40-foot standard container carrying general commodities. The study compares traditional routes with the new CPEC routes in terms of time, distance, and cost. The findings indicate that the new CPEC routes offer reduced travel time and distance when compared to the traditional routes across all provinces involved. The research reveals that the cost of road transportation along the new CPEC route is lower for Xinjiang province, but higher for the other provinces. By utilizing the new CPEC routes, the time required for goods to travel from China to the Middle East and Europe will be reduced by 10 to 20 days. Furthermore, the distance covered in this trade route will be shortened by 3,000 to 10,000 kilometres. Specifically, the province of Xinjiang in western China stands to benefit significantly from the new CPEC routes, saving approximately $2,000 on trade with the Middle East and Europe. These findings highlight the potential advantages and economic benefits that can be realized by leveraging the CPEC for trade between China, the Middle East, and Europe, particularly in terms of reduced transportation time and distance.
... Confirmation of the effect of the development of transport infrastructure on socio-economic development Kemmerling and Stephan, [20] Meersman and Nazemzedeh, [1] Yu et al. [2] Maparu and Mazumder, [3] Olsson [25] Muvawala et al. [26] Kadyraliev et al. [27] Alam et al. [28] Cieślik and Rokicki, [21] Komornicki et al. [29] Skorobogatova and Kuzmina-Merlino, [8] Effect on development depending on external factors and/or occurring only in some units (regions) ...
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The discussion about the impact of the construction of new transport infrastructure on economic growth has been going on in scientific journals for decades. The objective of the article is to assess the importance of the development of transport infrastructure for regional development in Central and Eastern European countries (CEEC). The analysis mainly concerns investments made with the support of European Union structural funds. Particular attention was paid to transport relations between the major metropolises. It is assumed that they perform the functions of growth poles and generate the diffusion of development processes also into the peripheral area. In addition, a study of changes in potential accessibility in road transport was carried out. The temporal scope of the study covers a period of 12 years, when the scale of new investment was greatest. The results thus obtained are set against a backdrop of economic development indices (changes in GDP over the period under study). The study confirmed that the impact on economic development mainly takes place at the beginning of the development of the transport infrastructure. On this basis, a dynamic spatial sequence proposal was formulated regarding the dependence between investments in infrastructure and the development of regions and metropolises.
... Ahmed et al. (2021) analyzed the impact of various types of transport infrastructures including road, rail, ports, and aviation on industrial output in Pakistan by adopting the Cobb-Douglas production function. Batool and Goldmann (2021) and Alam et al. (2021) assessed the impact of transport infrastructure investments on economic growth in Pakistan by adopting the Vector-Autoregressive model and the ARDL model, respectively. Mohmand et al. (2021) investigated the causal relationship between economic growth, infrastructure investments, fuel consumption, and carbon emissions of the transport sector in Pakistan using the ARDL model. ...
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The assessment of green productivity not only establishes the production ability but also involves economic, environmental, and social aspects which are the ultimate goals in achieving the sustainability. In this context, unlike the majority of previous literature, we have simultaneously considered the environmental and safety aspects to measure the static and dynamic evolution of green productivity to achieve a safe, eco-friendly, and sustainable development of the regional transport sector in South Asia. First, we proposed the super-efficiency ray-slack–based measure model with undesirable output to assess the static efficiency, which can effectively characterize weak and strong disposability relationship between desirable and undesirable outputs. Second, the biennial Malmquist-Luenberger index has been adopted to examine the dynamic efficiency, which can overcome recalculation issue once an additional time period is included in the data. Therefore, the proposed methodology provides more comprehensive, robust, and reliable insight in comparison to the conventional models. The results indicate (i) both static and dynamic efficiencies decreased during 2000–2019, implying that the transport sector in South Asia follows an unsustainable green development path at the regional level; (ii) dynamic efficiency was primarily held back by green technological innovation whereas green technical efficiency had a modest positive contribution. The policy implications suggest effective ways to improve green productivity of the transport sector in South Asia by promoting coordinated development among the transport structure, environmental and safety aspects, strengthening advance and innovative production technologies, endorsing green transportation practices, and implementing safety regulations and emission standards for the sustainable transport sector.
... In the case of daily data, this paper applied an autoregressive distributed lag (ARDL) model because it allows regressors to have a mixed order of integration for each variable, I(0) or I(1), and it is relatively more efficient in cases where small and finite sample data sizes are involved (Sam et al., 2019;Harris & Sollis, 2003). Besides that, all the variables were assumed to be endogenous, and were measured simultaneously for both long-run and short-run estimates through a linear transformation technique (Alam et al., 2020). The ARDL model is capable of taking a sufficient number of lags by capturing the data generation process from a general modelling framework (Laurenceson & Chai, 1998) ...
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Motivation and aim: Key policy initiatives taken by the Malaysian government in response to the disruptions to the labour market caused by the coronavirus (COVID-19) pandemic have been shown to have had a significant impact on reducing the unemployment rate. An empirical study was conducted examine the extent to which the reduction in the unemployment rate can be explained by an increase in job matching efficiency. Method and material: An autoregressive distributed lag (ARDL) model was employed for the empirical assessment. The daily administrative data on placements, vacancies and LOE from the Employment Insurance System (EIS) Office of the Social Security Organisation (SOCSO) for the period 2 January 2020 to 30 September 2020 were used. The data were split into two different periods, namely, for the pre-MCO (2 January 2020 to 17 March 2020) and the post-MCO (1 July 2020 to 30 September 2020) periods. The workers were categorised into three groups, namely, high-skilled, semi-skilled and lowskilled. Key findings: Overall, job matching efficiency tended to improve during the post-MCO. The most significant improvement in job matching efficiency was with regard to the semiskilled category. One of the factors that influenced job matching efficiency was the demand for workers in the semi-skilled group, which was higher compared to the demand for high-skilled and low-skilled workers. Policy implications: The results showed that the reduction in unemployment could be explained by the improvement in job matching efficiency. Government intervention and hiring incentives had caused the improvement in matching efficiency. Among all the skills categories, the most efficient matching was observed to have brought about the greatest improvement to the semi-skilled category.
... From the perspective of population urbanization, a region with high population density has enough labor force, which enhances the regional sustainable development momentum (Lan et al. 2019). From the perspective of land urbanization, a region with high land development intensity reflects a large space for infrastructure construction, which contributes to the urban economic development, food security and disaster prevention (Frayne and Mccordic 2015;Alam et al. 2021;Glade et al. 2022). Thacker et al. (2019) also found that infrastructure construction either directly or indirectly influences the achievement of all the SDGs, including 72% of the targets. ...
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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.
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Since 1964, Leading Issues in Economic Development has been a market leading undergraduate development textbook. Reviewers praise the new edition for its explanation of theories and its wide range of references to authors, international organisations and web sites.
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One of the major unresolved research issues in transport is the question as to whether transport infrastructure investment promotes economic growth at the regional and local levels. The concern is not with the transport benefits, principally measured as travel-time savings, but whether there are additional development benefits from these investments. If they do exist, can they be measured? In this paper, we have developed a new approach based on defining the set of necessary conditions for economic development to take place – in addition to the economic conditions, there are the investment conditions and the political and institutional conditions. It is argued that it is only when all three sets of necessary conditions are operating at the same time will measurable and additional economic development benefits be found. A conceptual approach will be presented to encompass these conditions. The paper will also address some of the key questions that have haunted researchers over the last twenty years on this subject area. These fairly detailed findings on the relationship between transport investment and economic development are followed by a series of more generic conclusions relating to other key concerns of analysis. Included here will be a discussion of the dimensions of analysis, a new proposal for project appraisal, decoupling transport from economic growth complexity and causality, accessibility and proximity, and the role of policy design.
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This paper develops a structural model of infrastructure and output growth that takes account of institutional and economic factors that mediate in the infrastructure–GDP interactions. Cross-country estimates of the model indicate that the contribution of infrastructure services to GDP is substantial and, in general, exceeds the cost of provision of those services. The results also shed light on the factors that shape a country's response to its infrastructure needs and offer policy implications for facilitating the removal of infrastructure inadequacies.
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The paper considers three separate but related topics. (i) What is the relationship between causation and co-integration? If a pair of I(1) series are co-integration, there must be causation in at least one direction. An implication is that some tests of causation based on different series may have missed one source of causation. (ii) Is there a need for a definition of ‘instantaneous causation’ in a decision science? It is argued that no such definition is required. (iii) Can causality tests be used for policy evaluation? It is suggested that these tests are useful, but that they should be evaluated with care.
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This paper attempts to propose a production function framework for analyzing the interrelation between public infrastructure expansion and private production growth and for identifying their externality effects. The framework consists of two versions of the dynamic two-sector model. Each sector is assumed to generate a spillover effect on the other. Growth equations are derived and estimated for seven East Asian economies over the period of 1979–1998. The empirical results indicate that both versions of the hypothesis about the existence of spillover effects cannot be rejected, although the influences of private production sector on public infrastructure sector are relatively greater. This implies that keeping a balance between infrastructure expansion and private sector growth is crucial for rapid economic development. An important issue regarding infrastructure is how efficiently does the government manage the existing stocks.