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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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Identification Number: 10.1111/j.1435-5957.2012.00439.x

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
Subjects: 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)
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Date Deposited: 26 Jun 2012 08:06
Last Modified: 06 Nov 2014 15:42
Projects: 269868
Funders: European Research Council under the European Union's Seventh Framework Programme (FP7/2007–2013)/ERC, Leverhulme Trust Major Research Fellowship
URI: http://eprints.lse.ac.uk/id/eprint/44464

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