Estimating the spatial spillover effects of transportation infrastructure on economic growth in an archipelagic nation
List of Authors
  • Joseph Andre Dela Pasion , Manuel Morga

Keyword
  • Spatial Spillover, Spatial Durbin, Transportation Infrastructure, Economic Growth, The Philippines

Abstract
  • Transportation infrastructure plays a crucial role in facilitating economic growth and mitigating socio-economic disparities. Countries with adequate transportation infrastructure have a comparative advantage in international and domestic trade and in reducing economic and social disparities. Numerous studies have examined the spatial relationship between transportation infrastructure and economic growth, particularly in developed nations like the US and China. However, research on developing countries is scarce and pays little attention to archipelagic nations like the Philippines. This paper estimates the spatial spillover effects of transportation infrastructures in the three major islands of the Philippines for the time period 2003–2020 using the spatial Durbin model (SDM). More specifically, it examined the spatial spillover effects of transportation infrastructure, specifically roads, bridges, airports, and seaports on economic growth. The findings indicate the presence of positive spillover effects of transportation infrastructure at both the national and island levels. However, the spillover effects of transportation infrastructure variables differ significantly across the three major islands. The road length in Luzon and Visayas exhibits a negative trend, whereas Mindanao demonstrates a significant positive trend. The bridges in Luzon and Visayas are positive. Airport passengers in Visayas and Mindanao are negative. Seaport passenger is negative in Luzon, Visayas, and Mindanao. Seaport cargo is positive across major islands. The results of this study indicate that the implementation of appropriate and targeted transportation infrastructure investments in each of the major islands has the potential to foster economic growth Moreover, the results can serve as a valuable resource and integral element of the government’s strategic plan for national and regional development, facilitating the acceleration of economic growth and enhancing productivity at the regional level.

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