Posted Content•
On the Road: Access to Transportation Infrastructure and Economic Growth in China
TL;DR: In this paper, the effect of access to transportation networks on regional economic outcomes in China over a twenty-period of rapid income growth was investigated, and it was shown that proximity to a transportation network has a moderate positive causal effect on per capita GDP levels across sectors, but no effect on overall GDP growth.
Abstract: 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.
Citations
More filters
TL;DR: In this paper, the authors exploited China's National Trunk Highway System as a large-scale natural experiment to contribute to our understanding of the question: are the resulting trade cost reductions a force for the diffusion of industrial and total economic activity to peripheral regions, or do they reinforce the concentration of production in space?
Abstract: Large-scale transport infrastructure investments connect both large metropolitan centres of production as well as small peripheral regions. Are the resulting trade cost reductions a force for the diffusion of industrial and total economic activity to peripheral regions, or do they reinforce the concentration of production in space? This article exploits China's National Trunk Highway System as a large-scale natural experiment to contribute to our understanding of this question. The network was designed to connect provincial capitals and cities with an urban population above 500,000. As a side effect, a large number of small peripheral counties were connected to large metropolitan agglomerations. To address non-random route placements on the way between targeted city nodes, I propose an instrumental variable strategy based on the construction of least cost path spanning tree networks. The estimation results suggest that network connections have led to a reduction in GDP growth among non-targeted peripheral counties. This effect appears to be driven by a significant reduction in industrial output growth. Additional results present evidence in support of a trade-based channel in the light of falling trade costs between peripheral and metropolitan regions.
641 citations
Cites background or methods from "On the Road: Access to Transportati..."
...…have studied the economic effects on suburbanization (Baum-Snow, 2007), skill premia in local labor markets (Michaels, 2008), long term GDP effects (Banerjee et al., 2012), gains from trade (Donaldson, 2013), urban form (Baum-Snow et al., 2012), and city growth (Duranton and Turner, 2012)....
[...]
...Recent contributions have studied the economic e¤ects on suburbanization (Baum-Snow, 2007), skill premia in local labor markets (Michaels, 2008), long term GDP e¤ects (Banerjee et al., 2009), gains from trade (Donaldson, 2010), urban form (Baum-Snow et al., 2012), and city growth (Duranton and Turner, 2012).9 This papers contribution is to 7There is debate about the robustness of the home market e¤ect. Davis (1998) nds that it disappears when all sectors incur transport costs....
[...]
...In addition, the relatively recent nature of the NTHS also allows me to test for network connection e¤ects on identical county samples both before and after the 6The second network is related to Banerjee et al. (2009) who propose straight line connections between Treaty Ports and historical cities as instruments for railway lines....
[...]
...Recent contributions have studied the economic e¤ects on suburbanization (Baum-Snow, 2007), skill premia in local labor markets (Michaels, 2008), long term GDP e¤ects (Banerjee et al., 2009), gains from trade (Donaldson, 2010), urban form (Baum-Snow et al....
[...]
...In addition to instrumenting for route placements on any given bilateral connection, such as by straight lines in Banerjee et al. (2012) or by applying Dijkstra’s algorithm on land cover and elevation data as in this paper, the spanning tree approach allows to instrument for the choice of bilateral…...
[...]
TL;DR: In this article, the authors examined the historical impact of railroads on the American economy and found that changes in market access are capitalized in agricultural land values with an estimated elasticity of 1.5.
Abstract: This paper examines the historical impact of railroads on the American economy. Expansion of the railroad network and decreased trade costs may aect all counties directly or indirectly, an econometric challenge in many empirical settings. However, the total impact on each county can be summarized by changes in that county’s \market access," a reduced-form expression derived from general equilibrium trade theory. We measure counties’ market access by constructing a network database of railroads and waterways and calculating lowest-cost county-to-county freight routes. As the railroad network expanded from 1870 to 1890, changes in market access are capitalized in agricultural land values with an estimated elasticity of 1.5. Removing all railroads in 1890 would decrease the total value of US agricultural land by 73% and GNP by 6.3%, more than double social saving estimates (Fogel 1964). Fogel’s proposed Midwestern canals would mitigate only 8% of losses from removing railroads.
595 citations
Posted Content•
TL;DR: In this article, the authors examined the historical impact of railroads on the American economy and found that the total impact on each county is captured by changes in that county's "market access," a reduced-form expression derived from general equilibrium trade theory.
Abstract: This paper examines the historical impact of railroads on the American economy. Expansion of the railroad network may have affected all counties directly or indirectly - an econometric challenge that arises in many empirical settings. However, the total impact on each county is captured by changes in that county's "market access," a reduced-form expression derived from general equilibrium trade theory. We measure counties' market access by constructing a network database of railroads and waterways and calculating lowest-cost county-to-county freight routes. As the railroad network expanded from 1870 to 1890, changes in market access were capitalized into county agricultural land values with an estimated elasticity of 1.1. County-level declines in market access associated with removing all railroads in 1890 are estimated to decrease the total value of US agricultural land by 64%. Feasible extensions to internal waterways or improvements in country roads would have mitigated 13% or 20% of the losses from removing railroads.
512 citations
TL;DR: In this paper, the authors investigate how the configurations of urban railroads and highways have influenced urban form in Chinese cities since 1990 and find that products with high weight-to-value ratios appear unresponsive to transport changes.
Abstract: We investigate how the configurations of urban railroads and highways have influenced urban form in Chinese cities since 1990. Each radial highway displaces at least 5 percent of central city population to surrounding regions and ring roads displace an additional 20 percent. Each radial railroad displaces 26 percent of central city industrial GDP with ring roads displacing an additional 50 percent. Products with high weight-to-value ratios appear unresponsive to transport changes. However, products with medium and low weight-to-value ratios decentralize in response to radial railroads and ring roads. Historical transportation infrastructure provides identifying variation in more recent measures of infrastructure. J.E.L.: R4, O2
419 citations
TL;DR: The authors explored the history of early-modern and modern China, from the seventeenth century to the present, examining the rise and fall of China's last empire, the emergence of a modern nation-state, the sources and development of revolution, and the implications of complex social, political, cultural, and economic transformations in the People's Republic of China.
Abstract: This course explores the history of early-modern and modern China, from the seventeenth century to the present. We will examine the rise and fall of China’s last empire, the emergence of a modern nation-state, the sources and development of revolution, and the implications of complex social, political, cultural, and economic transformations in the People’s Republic of China. Course materials include scholarly monographs, a memoir, primary sources, and visual and material artifacts that offer diverse perspectives. We will meet twice a week for a combination of lectures, discussion, and viewing of visual texts.
339 citations
References
More filters
TL;DR: In this article, the generalized method of moments (GMM) estimator optimally exploits all the linear moment restrictions that follow from the assumption of no serial correlation in the errors, in an equation which contains individual effects, lagged dependent variables and no strictly exogenous variables.
Abstract: This paper presents specification tests that are applicable after estimating a dynamic model from panel data by the generalized method of moments (GMM), and studies the practical performance of these procedures using both generated and real data. Our GMM estimator optimally exploits all the linear moment restrictions that follow from the assumption of no serial correlation in the errors, in an equation which contains individual effects, lagged dependent variables and no strictly exogenous variables. We propose a test of serial correlation based on the GMM residuals and compare this with Sargan tests of over-identifying restrictions and Hausman specification tests.
26,580 citations
TL;DR: In this article, the authors consider estimation and testing of vector autoregressio n coefficients in panel data, and apply the techniques to analyze the dynamic relationships between wages an d hours worked in two samples of American males.
Abstract: This paper considers estimation and testing of vector autoregressio n coefficients in panel data, and applies the techniques to analyze the dynamic relationships between wages an d hours worked in two samples of American males. The model allows for nonstationary individual effects and is estimated by applying instrumental variables to the quasi-differenced autoregressive equations. The empirical results suggest the absence of lagged hours in the wage forecasting equation. The results also show that lagged hours is important in the hours equation. Copyright 1988 by The Econometric Society.
3,736 citations
TL;DR: In this paper, the authors examined bias in dynamic models with fixed effects where both the number of time series observations and cross-sectional replications are small, and the formula bias estimate was in line with that in published Monte Carlo studies.
3,345 citations
"On the Road: Access to Transportati..." refers background in this paper
...36 Note that the estimates above avoid the Nickell (1981) bias as we do not control for lag growth....
[...]
TL;DR: In this paper, the theoretical micro-foundations of urban agglomeration economies are studied, based on sharing, matching, and learning mechanisms, and a handbook chapter is presented.
Abstract: This handbook chapter studies the theoretical micro-foundations of urban agglomeration economies. We distinguish three types of micro-foundations, based on sharing, matching, and learning mechanisms. For each of these three categories, we develop one or more core models in detail and discuss the literature in relation to those models. This allows us to give a precise characterisation of some of the main theoretical underpinnings of urban agglomeration economies, to discuss modelling issues that arise when working with these tools, and to compare different sources of agglomeration economies in terms of the aggregate urban outcomes they produce as well as in terms of their normative implications.
2,032 citations
01 Sep 2008
TL;DR: The authors presents a story of two Chinas, an entrepreneurial rural China and a state-controlled urban China, and uses the emerging Indian miracle to debunk the widespread notion that democracy is automatically anti-growth.
Abstract: Presents a story of two Chinas – an entrepreneurial rural China and a state-controlled urban China. In the 1980s, rural China gained the upper hand. In the 1990s, urban China triumphed. In the 1990s, the Chinese state reversed many of its rural experiments, with long-lasting damage to the economy and society. A weak financial sector, income disparity, rising illiteracy, productivity slowdowns, and reduced personal income growth are the product of the capitalism with Chinese characteristics of the 1990s and beyond. While GDP grew quickly in both decades, the welfare implications of growth differed substantially. The book uses the emerging Indian miracle to debunk the widespread notion that democracy is automatically anti-growth. As the country marked its 30th anniversary of reforms in 2008, China faces some of its toughest economic challenges and substantial vulnerabilities that require fundamental institutional reforms.
1,081 citations
"On the Road: Access to Transportati..." refers background or result in this paper
...Our results do not contradict the Fogelian (Fogel, 1962, 1964) interpretation or the view of (Huang, 2008) that during this period of fast growth, the Chinese government should not have focused so much on building transportation infrastructure....
[...]
...3 For example, see Huang (2008) for a discussion on infrastructure investment in recent years in China....
[...]
...Based on similar logic, China scholars have criticized the tremendous amount of public investment in domestic transportation infrastructure after 1990 (Huang, 2008)....
[...]