Transportation, Economic Growth and Spillover Effects: The Conclusion Based on the Spatial Econometric Model

Angang Hu () and Shenglong Liu ()
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Angang Hu: Center for China Study, School of Public Policy and Management, Tsinghua University, Beijing 100084, China
Shenglong Liu: Center for China Study, School of Public Policy and Management, Tsinghua University, Beijing 100084, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2010, vol. 5, issue 2, 169-186

Abstract: This paper tests the external spillover effects of the transportation on China’s economic growth from the theoretical and the empirical perspectives. Based on a logarithm production model, this study first proves the existence of the positive externality in the transportation. After that, the authors collect the data of the 28 provinces in China from 1985 to 2006, and use a relatively advanced spatial econometric method to test the positive externality. After constructing a spatial econometric model, the authors use the Maximum Likelihood (ML) method to estimate this model. According to the theoretical model and the empirical results, this article reaches the following conclusion: (1) The positive externalities in the transportation do exist; (2) From 1985 to 2006, the transportation contributed 24.8 billion yuan to China's GDP every year: in this 24.8 billion yuan, 19.6 billion comes from the direct contribution and the rest 5.2 billion comes from the external spillover effects; (3) The summation of the direct contribution and the external spillover effects to the economic growth is on average 13.8% every year.

Keywords: transportation; spillover effects; spatial autoregressive model; spatial moving average model; maximum likelihood estimation (search for similar items in EconPapers)
JEL-codes: L90 O18 R41 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (9)

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