Abstract:
This dissertation examines the relationship between public infrastructure and regional
economic productivity in China. Based on a panel data set for 29 regions of China for a
17-year period of 1987-2003, a three-step nonstationary panel analytical procedure is
conducted to investigate whether public infrastructure is productive in China. The results
show that public infrastructure is productive in China across 29 regions from 1987 to
2003, with a moderate estimated output elasticity of 0.15. Among the eastern, central and
western mega-regions in China, the productivity effect of public infrastructure is largest
in the central mega-region and smallest in the eastern mega-region. Moreover, the
estimated output elasticity in regard to the first-order neighboring public capital is about
0.11, which is even larger than that regarding public capital (0.09). Finally, a panel
Granger causality test is conducted to investigate the nature of the possible causal
relationship between public infrastructure and economic output in China. The results
demonstrate that there exist strong bilateral causal relationships between public
infrastructure and economic output in China. In particular, public infrastructure may
influence economic output during a longer time horizon than economic output does for
public infrastructure in China.
