Public Infrastructure Investment, Interstate Spatial Spillovers, and Manufacturing Costs

Cohen, Jeffrey P.; Paul, Catherine J. Morrison

doi:10.1162/003465304323031102

Cited by 227 publications

(133 citation statements)

References 19 publications

Supporting

Mentioning

116

Contrasting

Order By: Relevance

“…Examples of literature with similar regional-level analysis include: (i) Abidhadjaev (2015, 2017), Stephan (2003), Seung and Kraybill (2001), and Yoshino and Nakahigashi (2000)-using the production function approach; (ii) Cohen and Paul (2004) and Moreno et al (2003)-using the behavioral approach; and (iii) Pereira and Andraz (2012) and Everaert (2003)-using vector autoregression approach. As Pereira and Andraz (2013) demonstrate, literature on infrastructure impact evaluation found negative and positive regional effects.…”

Section: Methodsmentioning

confidence: 99%

Impact of infrastructure on tax revenue: Case study of high-speed train in Japan

Yoshino

Abidhadjaev²

2017

J Infrastruct Policy Dev

View full text Add to dashboard Cite

This study analyzes the impact of a high-speed rail line on tax revenues and on the economy of affected regions within the country. The economic impact of infrastructure investment can be induced by changes in tax revenues when the infrastructure is in operation. Accurate regional GDP data are not necessarily available in many Asian countries. However, tax data can be collected. Therefore, this study uses tax revenue dates in order to estimate spillover effects of infrastructure investment. The Kyushu high-speed rail line was constructed in 1991 and was completed in 2003. In 2004, the rail line started operating from Kagoshima to Kumamoto. The entire line was opened in 2011. We estimated its impact in the Kyushu region of Japan by using the differencein-difference method, and compared the tax revenues of regions along the high-speed railway line with other regions that were not affected by the railway line. Our findings show a positive impact on the region's tax revenue following the connection of the Kyushu rapid train with large cities, such as Osaka and Tokyo. Tax revenue in the region significantly increased during construction in 1991-2003, and dropped after the start of operations in 2004-2010. The rapid train's impact on the neighboring prefectures of Kyushu is positive. However, in 2004However, in -2013, its impact on tax revenue in places farther from the rapid train was observed to be lower. When the Kyushu railway line was connected to the existing high-speed railway line of Sanyo, the situation changed. The study finds statistically significant and economically growing impact on tax revenue after it was completed and connected to other large cities, such as Osaka and Tokyo. Tax revenues in the regions close to the high-speed train is higher than in adjacent regions. The difference-in-difference coefficient methods reveal that corporate tax revenue was lower than personal income tax revenue during construction. However, the difference in corporate tax revenues rose after connectivity with large cities was completed. Public-private partnership (PPP) has been promoted in many Asian countries. However, PPP-infrastructure in India failed in many cases due to the low rate of return from infrastructure investment. This study shows that an increase of tax revenues is significant in the case of the Kyushu rapid train in Japan. If half of the incremental tax revenues were returned to private investors in infrastructure, the rate of return from infrastructure investment would significantly rise for long period of time. It would attract stable and long-term private investors, such as pension funds and insurance funds into infrastructure investment. The last section of the paper will address how incremental tax revenues created by the spillover effects of infrastructure will improve the performance of private investors in infrastructure investment.

show abstract

Section: Methodsmentioning

confidence: 99%

Impact of infrastructure on tax revenue: Case study of high-speed train in Japan

Yoshino

Abidhadjaev²

2017

J Infrastruct Policy Dev

View full text Add to dashboard Cite

show abstract

“…See for instance Cohen and Paul (2004), and Teruel and Kuroda (2005). where Y is output, K I the stock of public capital in infrastructure, L labor, K P the stock of private capital, and α,β ∈ (0,1). Constant returns to scale therefore prevail in all factors.…”

Section: Productivity Of Private Inputsmentioning

confidence: 99%

Public Infrastructure and Growth: New Channels and Policy Implications

Agénor

Moreno-Dodson²

2006

SSRN Journal

View full text Add to dashboard Cite

This paper provides an overview of the various channels through which public infrastructure may affect growth. In addition to the conventional productivity, complementarity, and crowding-out effects typically emphasized in the literature, the impact of infrastructure on investment adjustment costs, the durability of private capital, and the production of health and education services are also highlighted. Effects on health and education are well documented in a number of microeconomic studies, but macroeconomists have only recently begun to study their implications for growth. Links between health, infrastructure, and growth are illustrated in an endogenous growth model with transitional dynamics, and the optimal allocation of public expenditure is discussed. The conluding section draws implications of the analysis for the design of strategies aimed at promoting growth and reducing poverty.

show abstract

“…The literature provides empirical evidence of the testing of a similar hypothesis using a production function approach (Abidhadjaev and Yoshino 2013;Seung and Kraybill 2001;Stephan 2003;Yoshino and Nakahigashi 2000), a behavioral approach (Cohen and Paul 2004;Moreno, López-Bazo, and Artís 2003) and using vector autoregression approaches (Everaert 2003;Pereira and Andraz 2010), inter alia.…”

Section: Assumptions Concerning the Geographical Impact Of Infrastrucmentioning

confidence: 99%

An impact evaluation of investment in infrastructure: The case of a railway connection in Uzbekistan

Yoshino

Abidhadjaev

2017

Journal of Asian Economics

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. Umid Abidhadjaev is a research associate at ADBI.The authors would like to thank Georg Inderst, Sahoko Kaji, Khalilillo Khamidov, Marie Lall, Colin McKenzie, Masao Ogaki, Alfredo Pereira, Victor Pontines, and Michael Regan, as well as the participants of the Public Economics Seminar at Keio University, the AICILS conference at the University of Oxford, and the ICHE conference at Cornell University for their comments and meaningful contributions to earlier discussion of the results of the current research. Umid Abidhadjaev would also like to acknowledge the financial support provided by the Head Office of the Research Development and Sponsored Programs at Keio University under the Keio University Doctorate Student Grant-in-Aid Program.The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Working papers are subject to formal revision and correction before they are finalized and considered published.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, Japan AbstractThe objective of this paper is to examine the nature and magnitude of the effects of infrastructure provision on regional economic performance. The empirical evidence of our analysis is based on difference-in-difference estimation linking the changes in the growth rate of regional-level economic outcomes in affected regions to the newly built railway connection in the southern part of Uzbekistan, conditioned on the regions' timeinvariant individual effects, time-varying covariates, and evolving economic characteristics. To explore the differential nature of infrastructure provision, we employ an estimation examining re...

show abstract

Public Infrastructure Investment, Interstate Spatial Spillovers, and Manufacturing Costs

Cited by 227 publications

References 19 publications

Impact of infrastructure on tax revenue: Case study of high-speed train in Japan

Impact of infrastructure on tax revenue: Case study of high-speed train in Japan

Public Infrastructure and Growth: New Channels and Policy Implications

An impact evaluation of investment in infrastructure: The case of a railway connection in Uzbekistan

Contact Info

Product

Resources

About