International Productivity Differences, Infrastructure, and Comparative Advantage*

Abstract

This paper provides an empirical analysis of the effect of infrastructure provision on industry-level productivity and international specialization, as suggested by Clarida and Findlay's (1992 ) model. We calculate total factor productivity (TFP) for 18 developed and developing countries and 10 manufacturing industries, and study the effects of supplies of roads, telecommunications and electric power on international variations in sectoral TFP, i.e. comparative advantage. We also examine the effects of infrastructure on the sectoral composition of output across countries. Using a three-stage least-squares estimation strategy to control for endogeneity of infrastructure provision, we find that infrastructure, especially roads, helps to explain patterns of comparative advantage and international specialization. Copyright � 2007 The Authors; Journal compilation � 2007 Blackwell Publishing Ltd.

The role of private sector in development: The relation between public-private investment in infrastructure and agricultural exports in developing countries

“…Yeaple and Golub (2007) study the effect of the infrastructure investment on ten different industrial sectors, and find that increased provision of infrastructure helps to explain patterns of international specialization and trade. Mbekeani (2010) suggests that inadequate infrastructure and poor transport organization in Africa hinder the timely delivery reliability in the supply of goods.…”

“…Previous studies that analyzed the relationship between trade and infrastructure have found a positive and significant impact of infrastructure on trade (Limão and Venables, 2001;Nordäs and Piermartini, 2004;Yeaple and Golub, 2007). Focusing on the increasing public-private partnerships, the aim of this paper is to analyze the relationship between public-private investments in infrastructure on the agricultural exports of developing countries.…”

Impact of road transport on foreign direct investment and economic growth: Empirical evidence from simultaneous equations model

“…Chakraborty and Nandi (2011); Khandker and koolwal (2011) argued that the impact of the procurement of transport and communication infrastructure is a topic that has attracted considerable attention in the literature along the few last years. Yeaple, and Golub (2007) say that the transport infrastructures have the greatest potential to stimulate the economy in the long-run. In addition, several economists affirm that there is no doubt that there is a strong linkage between investments in transport infrastructures and economic productivity.…”

“…To demonstrate the role of road transport in the development of economic activity, Yeaple, and Golub (2007) present their study for 12 developed and developing countries. In their study, they estimated the effects of three types of infrastructure (roads, telecommunications, and electricity) on total factor productivity in 10 industrial sectors between 1979 and 1997.…”

“…Indeed, it allows to expand the regions in which the products may be commercialized, for example, good roads help to save time for transportation of freight; this will allow companies to produce cheaper, to benefit from a gain on time and even on the equipment used. According to Fernald (1999) ;Yeaple, and Golub (2007), transport infrastructure has made the production and distribution process more efficient and the access to different markets easier (goods and services market, labor market). Khanam (1999) studied the effects of road networks on the Canadian manufacturing industry between 1961 and 1994, by estimating a Cobb-Douglas function.…”