Transport Infrastructure To Regional Economic Growth In The Space Overflow

It has always been assumed that a high quality transport infrastructure is an essential prerequisite for economic development, yet this assumption has never really been investigated in depth. Over time it has become axiomatic and part of the underlying rationale for transport investment decisions.This subject has been pursued in a large body of resent research. Most of the related literature has focused on whether or not infrastructure has productive effects and has given relatively little attention to how productive public capital might shift economic activity from one location to another, however.This paper assumes transport infrastructure has the effects of spatial spillovers on regional economic growth. These spillovers can be either positive or negative. The positive spillovers would be caused by the connectivity characteristic of most transport public capital. This network characteristic supposes that any piece of a network is related and subordinate to the entire network, increasing the interrelationships between regions. Hence, part of the infrastructure benefits would felt beyond the limits of the region where it is located. Alternatively, the negative spillover would arise from factor migration, in the sense that transport infrastructure in one region could have a negative effect in those other regions that are the region's closest competitors for labor and mobile capital.Using panel data for 11 cities of Zhejiang Province from 1994 to 2003, the spatial spillovers would be manifested as a positive output spillover from transport infrastructure in a linear production-function framework.This paper draws heavily on the tools and techniques used in resent work on spatial econometrics. Some spatial weighted matrixes are used to define the different neighboring cities to measure how easily factors or economic activities can migrate between regions.