The Joint Impact of Infrastructure and Institutions on Economic Growth

Yitagesu Zewdu Zergawu, Yabibal Walle and Giménez Gómez, José M. (José Manuel)

Working Papers from Universitat Rovira i Virgili, Department of Economics

Abstract: This paper examines the joint impact of infrastructure capital and institutional quality on economic growth using a large panel data set covering 120 countries and spanning the years 1980-2015. The empirical strategy involves estimating a simple growth model where, in addition to standard controls, infrastructure, institutional quality and their interaction are included as explanatory variables. Potential endogeneity concerns are addressed by means of GMM estimators that utilize internal instruments. We findd that the interaction terms between infrastructure capital and institutional quality have a positive and significant impact on economic growth. These results are robust to a variety of alternative specifications and institutional quality measures. Hence, our results suggest that maximizing returns from infrastructure development requires improving the quality of institutions. Keywords: infrastructure; institutions; growth; dynamic panel JEL classification: H54, F20

Keywords: Infraestructura (Economia); Economia internacional; 33 - Economia (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-gro and nep-tre
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Citations: View citations in EconPapers (2)

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http://hdl.handle.net/2072/332584

Related works:
Journal Article: The joint impact of infrastructure and institutions on economic growth (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:urv:wpaper:2072/332584

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