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Infrastructure and regional growth in the European Union

Crescenzi, Riccardo and Rodríguez-Pose, Andrés (2012) Infrastructure and regional growth in the European Union. Papers in Regional Science, 91 (3). pp. 487-615. ISSN 1056-8190

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Abstract

Transport infrastructure has represented one of the cornerstones of development and cohesion strategies in the European Union (EU) and elsewhere in the world. However, despite the considerable funds devoted to it, its impact remains controversial. This paper revisits the question of to what extent transport infrastructure endowment - proxied by regional motorways - has contributed to regional growth in the EU between 1990 and 2004. It analyses infrastructure in relationship to other factors which may condition economic growth, such as innovation, migration, and the local 'social filter', taking also into account the geographical component of intervention in transport infrastructure and innovation. The results of the two-way fixed-effect (static) and difference GMM (dynamic) panel data regressions indicate that infrastructure endowment is a relatively poor predictor of economic growth and that regional growth in the EU results from a combination of an adequate 'social filter', good innovation capacity, both in the region and in neighbouring areas, and a region's capacity to attract migrants. The meagre returns of infrastructure endowment on economic growth raise interesting questions about the opportunity costs of further infrastructure investments across most of Western Europe.

Item Type: Article
Official URL: http://onlinelibrary.wiley.com/journal/10.1111/%28...
Additional Information: © 2012 The Author(s). Papers in Regional Science © 2012 RSAI
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HE Transportation and Communications
H Social Sciences > HF Commerce
H Social Sciences > HJ Public Finance
J Political Science > JN Political institutions (Europe)
Journal of Economic Literature Classification System: R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
R - Urban, Rural, and Regional Economics > R4 - Transportation Systems > R42 - Government and Private Investment Analysis
R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R58 - Regional Development Policy
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Funders: European Research Council under the European Union's Seventh Framework Programme (FP7/2007–2013)/ERC, Leverhulme Trust Major Research Fellowship
Projects: 269868
Date Deposited: 26 Jun 2012 08:06
URL: http://eprints.lse.ac.uk/44464/

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