Facebook LinkedIn Twitter

This is an Free article. You will receive access to the full text.

Economic Growth and Infrastructure Investments in Energy and Transportation: A Causality Interpretation of China’s Western Development Strategy

Free Article

Were the large investments in energy and transportation infrastructure effective in fostering economic growth? Or did economic growth trigger these infrastructure developments? To answer these questions, we develop a simple model of production capacity constraints and use China's Western Development Strategy (WDS) as an example to investigate how the relationships among energy investment, transportation infrastructure expansion and economic growth differ in the pre-and post-WDS periods. Our Granger causality analysis uses a panel data sample for China's 30 provinces in the Western and non-Western regions for the period of 1991-2012. We find Granger causality only in the post-WDS period from transportation infrastructure expansion to economic growth and from economic growth to energy investment. These results suggest energy and transportation capacity constraints in the post-WDS period but not the pre-WDS period. Their policy implication is that China should continue its energy and transportation infrastructure investments with improved coordination.

Download Executive Summary Download PDF

Keywords: Economic growth, Energy and transportation infrastructures, Causality, China

DOI: 10.5547/01956574.37.SI1.ashi

References: Reference information is available for this article. Join IAEE, log in, or purchase the article to view reference data.

Published in Volume 37, China Special Issue of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.