Is Transport Infrastructure Construction A Wise Choice For Stimulating Economic Growth In West China

This article reports on a study of transport infrastructure construction in West China, an area with relatively low productivity and in need of economic growth. The authors used 1999-2009 panel data from 12 western provinces to examine economic returns and the spillover effects of transportation network capital stock; they compare this data to other public sector capital stock in a spatial context. Public sector investment includes investments in public production and supply of electricity, gas and water, environment control, scientific research, technical services, education, health, social securities, social welfare, culture, sports and entertainment, public management, and social organizations. Results showed that both transport capital and other public capital have positive direct effects, but other public capital in West China has greater economic returns than capital spent on the transportation network. The authors conclude with a brief discussion of the implications of this research, noting that their results suggest China should reconsider its current public investment pattern in West China. They recommend a balance between investment in transport infrastructure and other production factors in order to optimize the allocation of resources.