ABSTRACT
Studies on the productivity effects of infrastructure have produced ambiguous results because of potential inter-sectoral dependencies, non-stationarity and endogeneity issues in estimation. Employing estimators that address these problems, we test the effects of a composite infrastructure index on a panel of industries for four major-Asian economies. Our results indicate positive and sizable long-run effects of infrastructure on productivity for India and China, but not for Japan and S. Korea.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 This follows from infrastructure-demand estimation literature that identifies per-capita income as a crucial infrastructure input (Fay and Yepes Citation2003).
2 Cross-sectional dependency, non-stationarity and endogeneity are reasons of inconsistencies in the previous results. Employing CPMG effectively overcomes these potential problems (Chudik and Pesaran Citation2013).