Title: Integrating Network Analysis with the Production Function Approach to Study the Spillover Effects of Transport Infrastructure
Citation: REGIONAL STUDIES vol. 50 no. 6 p. 996-1015
Publication Year: 2016
JRC N°: JRC90449
ISSN: 0034-3404
URI: http://www.tandfonline.com/doi/abs/10.1080/00343404.2014.953472?journalCode=cres20
DOI: 10.1080/00343404.2014.953472
Type: Articles in periodicals and books
Abstract: The production function approach is used to analyze the role of transport infrastructure on regional GDP using new definitions and measures of road network capital stock that represent the real benefit obtained by regions when accessing markets. Improving the existing methodologies, we weight the infrastructure stock with trade data so as to estimate the direct effects on production of a region’s own infrastructure (what we term internal stock), as well as the spillover effects that it receives from using that of neighboring regions (imported stock). We illustrate our methodology using Spanish data for the 1980-2007 period and calculate these internal and imported infrastructure stocks using GIS network analysis based on generalized transportations costs. With this new dataset we perform successive regressions controlling for endogeneity and compare the obtained results to those of previous research. We confirm the validity of this methodology and the existence of significant and rather large spillover effects that even outweigh the effect of the internally endowed capital stock on aggregate production. On average the relative magnitude of the spillover effects to that of the internal (own) stock effect increases with the level of territorial disaggregationi.e., it is larger for provincial data than for regional data. Unfortunately, we also find that spillover effects are asymmetric, exhibiting negative values for poorer regions, as they do not profit from the capital stock existing in their neighboring areas as their richer counterparts do, thereby casting doubts on the cohesion effects attributed to transport infrastructure investments.
JRC Directorate:Growth and Innovation

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