Journal of International Trade & Economic Development · 2011 · 158 citations · 64 references
Social SciencesEconomicsDevelopment EconomicsEconomic DevelopmentInternational TradeCointegration AnalysisEconomic GrowthInfrastructure DevelopmentInfrastructure InvestmentPanel Data AnalysisPanel Data MethodsEconomic Growth DynamicsEconomic Infrastructure DevelopmentInternational Infrastructure InvestmentInternational Trade EconomicsLabor Force AnalysisPanel Data Production Functions
The study investigates how infrastructure output elasticity affects economic growth in India, Pakistan, Bangladesh, and Sri Lanka between 1980 and 2005. Using panel cointegration techniques, the authors construct an infrastructure stock index and analyze its long‑run relationship with output. Results show a long‑run equilibrium between output and infrastructure, with infrastructure, capital formation, labor, trade, and human capital all positively contributing, and evidence of bidirectional causality.
We examine the output elasticity of infrastructure for four South Asian countries viz., India, Pakistan, Bangladesh, and Sri Lanka using panel cointegration techniques for the period 1980–2005. In this context, we develop an index of infrastructure stocks and investigate the impact of infrastructure on output. The study finds a long-run equilibrium relationship between output and infrastructure along with other relevant variables, such as gross domestic capital formation (GDCF), labor force, international trade and human capital. The results reveal that GDCF, labor force, export and expenditure on human capital exhibit a positive contribution to output. More importantly, infrastructure development contributes significantly to output growth in South Asia. Further, the panel causality analysis shows that there is mutual feedback between total output and infrastructure development.
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