The direct and indirect effects of infrastructure on firm productivity: Evidence from Chinese manufacturing

Guanghua Wan and Yan Zhang

China Economic Review, 2018, vol. 49, issue C, 143-153

Abstract: This paper attempts to distinguish and estimate the direct and indirect effects of infrastructure on firm productivity. The latter arises from the infrastructure-agglomeration link and has been largely overlooked in the literature on infrastructure. An analytical framework is then proposed to estimate both effects. Finally, empirical results are obtained using large-scale firm-level survey data from China. Major findings include: (1) all the three kinds of infrastructure–road, telecommunication servers and cable–are found to directly promote firm productivity; (2) they also exert a positive indirect effect on firm productivity through the agglomeration channel; and (3) the empirical results are robust to different agglomeration indicators and different subsamples.

Keywords: Infrastructure; Indirect effect; Firm productivity; Agglomeration (search for similar items in EconPapers)
JEL-codes: D21 D23 L1 R12 R3 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:49:y:2018:i:c:p:143-153

DOI: 10.1016/j.chieco.2017.04.010

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