Non-linear effects of investment in road infrastructure on the structural competitiveness of the economy: the case of Burkina Faso

SIGUE, Moussa and SIRPE, Gnanderman (2019): Non-linear effects of investment in road infrastructure on the structural competitiveness of the economy: the case of Burkina Faso.

Abstract

This paper assesses the non-linear effects of road infrastructure investment on the structural competitiveness of Burkina Faso's economy. After retaining the period from 1980 to 2015, the quadratic and spline estimation revealed a non-linearity between the structural economy competitiveness and investment in road infrastructure. Indeed, the quadratic estimate identified non lineary U-shaped inverted with an optimal threshold of 10.11%. With regard to the spline estimation, it also highlighted this nonlinearity and gave an optimal interval of [5%;15%]. The economic policy implication that emerges from these results is that in order to benefit from optimal structural competitiveness, the investment’s share in road infrastructure in the total investment budget must be between5% and 15%.

• Item Type: MPRA Paper
• Language: English
• Keywords: Structural competitiveness; Investment in road infrastructure; Non-linearity; Burkina Faso
• Subjects: F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies; H - Public Economics > H5 - National Government Expenditures and Related Policies > H54 - Infrastructures ; Other Public Investment and Capital Stock; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R42 - Government and Private Investment Analysis ; Road Maintenance ; Transportation Planning

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