NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

On the Road: Access to Transportation Infrastructure and Economic Growth in China

Abhijit Banerjee, Esther Duflo, Nancy Qian

NBER Working Paper No. 17897
Issued in March 2012
NBER Program(s):Economic Fluctuations and Growth, Productivity, Innovation, and Entrepreneurship

This paper estimates the effect of access to transportation networks on regional economic outcomes in China over a twenty-period of rapid income growth. It addresses the problem of the endogenous placement of networks by exploiting the fact that these networks tend to connect historical cities. Our results show that proximity to transportation networks have a moderate positive causal effect on per capita GDP levels across sectors, but no effect on per capita GDP growth. We provide a simple theoretical framework with empirically testable predictions to interpret our results. We argue that our results are consistent with factor mobility playing an important role in determining the economic benefits of infrastructure development.

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Document Object Identifier (DOI): 10.3386/w17897

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