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Connective Financing: Chinese Infrastructure Projects and the Diffusion of Economic Activity in Developing Countries

Richard Bluhm, Axel Dreher (), Andreas Fuchs (), Bradley C. Parks, Austin M. Strange and Michael J. Tierney
Additional contact information
Bradley C. Parks: SoDa Laboratories, Monash University
Austin M. Strange: SoDa Laboratories, Monash University
Michael J. Tierney: SoDa Laboratories, Monash University

No 2020-06, SoDa Laboratories Working Paper Series from Monash University, SoDa Laboratories

Abstract: This paper studies the causal effect of transport infrastructure on the spatial concentration of economic activity. Leveraging a new global dataset of geo-located Chinese government-financed projects over the period from 2000 to 2014 together with measures of spatial inequality based on remotely-sensed data, we analyze the effects of transport projects on the spatial distribution of economic activity within and between regions in a large number of developing countries. We find that Chinese-financed transportation projects reduce spatial concentration within but not between regions. In line with land use theory, we document a range of results which are consistent with a relocation of activity from city centers to their immediate periphery. Transport projects decentralize economic activity particularly strongly in regions that are more urbanized, located closer to the coast, and less developed.

Keywords: transport costs; infrastructure; development finance; spatial concentration; China (search for similar items in EconPapers)
JEL-codes: F15 F35 O18 O19 P33 R11 R12 (search for similar items in EconPapers)
Date: 2020-11
New Economics Papers: this item is included in nep-dev, nep-geo, nep-ppm, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
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Working Paper: Connective Financing - Chinese Infrastructure Projects and the Diffusion of Economic Activity in Developing Countries (2020) Downloads
Working Paper: Connective Financing - Chinese Infrastructure Projects and the Diffusion of Economic Activity in Developing Countries (2020) Downloads
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