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Transport Infrastructure Investments as a Factor of Economic Growth of European Union Countries

Transport Infrastructure Investments as a Factor of Economic Growth of European Union Countries AbstractTerritorial cohesion and improved accessibility are among the main objectives of the European Union (EU) Cohesion policy. Although there is a wealth of literature on the impact of investment in transport infrastructure on overall accessibility levels, only a few studies have tried to evaluate the possible link between transport infrastructure investment (TII) and economic growth in the EU. Our research aims to evaluate the impact of TII on economic growth in the EU. The methodology is based on nonlinear neoclassical specification, which includes a multiplicative term to evaluate if the absence of corruption mediates the effect of TII on growth. Our unbalanced panel data covers 27 EU countries (Cyprus is excluded due to missing data and the United Kingdom is a part of the sample) from 2000 through 2019. Our research confirms a positive and statistically significant impact of TII on economic growth but with a diminishing return. Estimating the absence of corruption as a possible moderator of the effect that TII has on growth shows that control of corruption plays a significant role in the TII growth nexus. We find that in countries with a low level of control of corruption, TII has a statistically significant negative effect on growth. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Baltic Journal of European Studies de Gruyter

Transport Infrastructure Investments as a Factor of Economic Growth of European Union Countries

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Publisher
de Gruyter
Copyright
© 2023 Mindaugas Butkus et al., published by Sciendo
ISSN
2228-0596
eISSN
2674-4619
DOI
10.2478/bjes-2023-0008
Publisher site
See Article on Publisher Site

Abstract

AbstractTerritorial cohesion and improved accessibility are among the main objectives of the European Union (EU) Cohesion policy. Although there is a wealth of literature on the impact of investment in transport infrastructure on overall accessibility levels, only a few studies have tried to evaluate the possible link between transport infrastructure investment (TII) and economic growth in the EU. Our research aims to evaluate the impact of TII on economic growth in the EU. The methodology is based on nonlinear neoclassical specification, which includes a multiplicative term to evaluate if the absence of corruption mediates the effect of TII on growth. Our unbalanced panel data covers 27 EU countries (Cyprus is excluded due to missing data and the United Kingdom is a part of the sample) from 2000 through 2019. Our research confirms a positive and statistically significant impact of TII on economic growth but with a diminishing return. Estimating the absence of corruption as a possible moderator of the effect that TII has on growth shows that control of corruption plays a significant role in the TII growth nexus. We find that in countries with a low level of control of corruption, TII has a statistically significant negative effect on growth.

Journal

Baltic Journal of European Studies – de Gruyter

Published: Jun 1, 2023

Keywords: control of corruption; diminishing marginal effects; economic growth; transport infrastructure; transport infrastructure investment

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