Transport Infrastructure, City Productivity Growth and Sectoral Reallocation: Evidence from China

December 11, 2018

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Format: Chicago

Yang Yang. Transport Infrastructure, City Productivity Growth and Sectoral Reallocation: Evidence from China, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper examines the impact of highway expansion on aggregate productivity growth and sectoral reallocation between cities in China. To do so, I construct a unique dataset of bilateral transportation costs between Chinese cities, digitized highway network maps, and firm-level census. I first derive and estimate a market access measure that summarizes all direct and indirect impact of trade costs on city productivity. I then construct an instrumental variable to examine the causal impact of highways on economic outcomes and the underlying channels. The results suggest that highways promoted aggregate productivity growth by facilitating firm entry, exit and reallocation. I also find evidence that the national highway system led to a sectoral reallocation between cities in China.

Subject: 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

Publication Details

Pages:

63
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/276
Stock No:

WPIEA2018276
ISBN:

9781484389584
ISSN:

1018-5941

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