Transport Infrastructure, City Productivity Growth and Sectoral Reallocation: Evidence from China
IMF Working Papers, December 11, 2018
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- Transport Infrastructure, City Productivity Growth and Sectoral Reallocation: Evidence from China
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Bibliographic details
- Authors: Yang Yang
- Published: December 11, 2018
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484389584.001
Summary
- Author: Yang Yang
- Date: December 11, 2018
- This paper examines the impact of highway expansion on aggregate productivity growth and sectoral reallocation between cities in China.
- Data assembled: a unique dataset of bilateral transportation costs between Chinese cities, digitized highway network maps, and firm-level census.
- Core approach: derive and estimate a market access measure that summarizes all direct and indirect impact of trade costs on city productivity; construct an instrumental variable to examine the causal impact of highways on economic outcomes and the underlying channels.
Methodology and Measures
- Market access measure: derived and estimated to capture direct and indirect impacts of trade costs on city productivity.
- Instrumental variable: constructed to identify the causal impact of highways on economic outcomes and channels.
- Microdata: firm-level census used to observe firm entry, exit, and reallocation dynamics.
Key Findings
- Highways promoted aggregate productivity growth by facilitating firm entry, exit and reallocation.
- Evidence indicates the national highway system led to a sectoral reallocation between cities in China.
Subjects and Keywords (as listed in the source)
- Subjects: Economic sectors, Infrastructure, Manufacturing, National accounts, Population and demographics, Production, Productivity, Total factor productivity, Transportation
- Keywords: C. firm Productivity, census data, China, City productivity growth, dependent variable, evidence from China, firm TFP, Global, highway, Infrastructure, logistics company, Manufacturing, market access, production efficiency, productivity, sectoral reallocation, Total factor productivity, trade, Transport infrastructure, Transportation, transportation cost, WP