Impact of Infrastructure Investment on Tax: Estimating Spillover Effects of the Kyushu High-Speed Rail Line in Japan on Regional Tax Revenue

Yoshino, Naoyuki; Abidhadjaev, Umid

doi:10.2139/ssrn.2787604

Cited by 16 publications

(14 citation statements)

References 25 publications

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“…Stakeholders included investors, government, landowners, farmers, and businessmen both from SMEs and start-ups. Yoshino and Abidhadjaev (2016b) pointed out that secondary school and university education together with infrastructure investments create higher GDP in the region, as estimated through the use of data from 40 countries.…”

Section: Determinant Factors Increasing the Economic Value Of Spillovmentioning

confidence: 99%

Innovative Financing for City Infrastructure Investment by Increasing the Rate of Return from Spillover Tax Revenues

et al. 2019

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The growing trend of urban city development requires various infrastructure investments, including water supply, electricity, sanitation, transportation, and other supporting facilities. In facing this challenge, many Asian countries experience significant constraints, particularly on the issues of land acquisition and insufficient financial supply, which potentially create a time delay in infrastructure investment and huge budget deficits. If these infrastructure investments were financed by overseas investors, future exchange rate risks would have to be carried by infrastructure companies. This paper examines further ways to attract more investment in infrastructure by applying spillover tax revenues. Case studies of some innovative financing aspects of Japan and other countries are also presented.

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Section: Determinant Factors Increasing the Economic Value Of Spillovmentioning

confidence: 99%

Innovative Financing for City Infrastructure Investment by Increasing the Rate of Return from Spillover Tax Revenues

et al. 2019

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“…Moreover, the Kyushu Railway line project in Japan generated between ¥76 billion and ¥97 billion in tax revenues in the two groups of cities directly affected by the railway line between 2004 and 2010. After linking the Kyushu Railway line with the Sanyo high-speed rail line in 2011, the revenues more than doubled to ¥201 billion and ¥229 billion, respectively, creating a "statistically significant" effect on the overall economy and connectivity in the Kyushu region (Yoshino and Abidhadjaev, 2015b).…”

Section: Financing Public Infrastructure In Asia: In Search Of New Somentioning

confidence: 99%

“…In the Philippines, the construction of the Southern Tagalog Arterial Road in Batangas province generated substantial private business activity besides increasing tax collections for the province within 3-4 years (Nakahigashi, et al, 2017). In Uzbekistan, the railway construction along the Tashguzar-Boysun-Kumkurgon line enabled the regional GDP in affected regions to grow by 2% due to the impact of infrastructure provision on industrial output and aggregate services (Yoshino and Abidhadjaev, 2015a). Ahmad (2014);World Bank (2017) and Organisation for Economic Co-operation and Development (2015) gross domestic product estimates.…”

Section: Financing Public Infrastructure In Asia: In Search Of New Somentioning

confidence: 99%

“…For example, new infrastructure investments financed by tax revenues enabled investors to increase the rate of return on their investments, by around 39%-43% in Japan and by 14%-16% in Uzbekistan (Yoshino and Abidhadjaev, 2015a;2015b). In addition to the increased tax revenues, firms located in the region affected by the infrastructure development could also realize "productivity" spillovers.…”

Section: Financing Public Infrastructure In Asia: In Search Of New Somentioning

confidence: 99%

“…The externalities, or spillover effects, of infrastructure development on economic growth are seldom highlighted as a vital source of public finance. Recent studies (Yoshino and Abidhadjaev, 2015a;2015b;Nakahigashi, Pontines and Yoshino, 2017), however, show how good infrastructure projects can impact future investments by increasing the returns to the private sector. As shown in the Figure 4, infrastructure projects such as railways create positive effects for the affected areas by generating new businesses and markets as well as creating new jobs.…”

Section: Financing Public Infrastructure In Asia: In Search Of New Somentioning

confidence: 99%

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Toward an innovative approach of financing infrastructure in Asia

Rillo

Ali²

2018

J Infrastruct Policy Dev

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Infrastructure development is critical for sustaining Asia’s economic growth. Unfortunately, huge financing gaps—estimated by a recent Asian Development Bank study to be USD22.5 trillion—constrain the ability of most emerging Asian countries to fully realize the benefits of infrastructure development. For instance, over 70% of infrastructure investments in Asia are still funded by public resources, which pose acute financing challenges for many countries with limited budgets and fiscal constraints. This paper discusses some of the challenges associated with public financing of infrastructure projects in emerging Asian countries, before introducing some new options for alleviating their infrastructure investment needs. In particular, it proposes a new approach to infrastructure financing by utilizing the spillover effects of infrastructure investment, where additional revenues generated from such investment can be channeled back to investors as subsidy to increase the returns to their investment. The paper also argues the need for Asian countries to implement fiscal reforms and to develop a more balanced approach to financing, one that involves both the private and public sector.

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