Exploring the Relationship between Transportation Infrastructure and Regional Economic Growth Using Losch’s Location Theory

Abstract

There are some knowledge gaps regarding the relationship between transportation infrastructure and economic development, especially about economic impacts that occur due to implementation of infrastructure in a given region, albeit various studies have addressed the issue. This paper aims to identify variables that affect economic development in order to contribute to the development of a theoretical model that could explain the relationship between transportation infrastructure and economic development. The theoretical model is satisfactory because it begins by analyzing the actions generated by the transportation infrastructure. Moreover, the model is based on the Location Theory considering the economic development and taking into account variables such as transportation costs, gain, product value, consumption, competition between companies and lastly monopoly. Finally, an econometric procedure, Spatial Panel Auto Regressive Vector Model (PVAR), was used to evaluate the relationship between economic development and investments in transportation infrastructure.

Change in the Urban Landscape of the Drakensberg Mountain Region, South Africa: A Case Study of Phuthaditjhaba

“…The theory of ''central place'' postulated in 1933 (Christaller 1966) and modified in 1940 (Lo ¨sch 1954) assumes that settlement development happens for economic reasons (Almeida et al 2021). Central place theory is based on spatial equilibrium; it emphasizes the relationship between city development and economic activity, and it also explains how the city spreads based on the utilities and services it provides (Vilajosana et al 2013).…”