Revisited the Relationship Between Economic Growth and Transport Infrastructure in India: An Empirical Study

Ghosh, Prabir Kumar and Dinda, Soumyananda (2019): Revisited the Relationship Between Economic Growth and Transport Infrastructure in India: An Empirical Study. Published in: Indian Economic Journal , Vol. 70, No. 1 (1 March 2022): pp. 34-52.

Abstract

This study empirically re-examines the relationship between transport infrastructure and economic growth in India for the period 1990–2017. Multivariate dynamic models are applied to estimate the relationship between economic growth and different modes of transport infrastructure namely road, rail and air transports in the vector error correction model framework. The results reveal that road and air transports have significant positive contribution to economic growth in the long-run while rail transport is insignificant. This study further examines the said issue using unit free index variables and has constructed a composite index of transport infrastructure using principal component analysis to analyze the nexus between aggregate transport infrastructure and economic growth in India in the post globalization era. The results of the study indicate the bidirectional causality between aggregate transport infrastructure and economic growth. Results of this study suggest incorporating feedback issue in policy formulations.

• Item Type: MPRA Paper
• Language: English
• Keywords: Multivariate model, Composite Index, Transport Infrastructure, Globalization, VECM, PCA, Causality.
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics

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