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Development of the model to examine the impact of infrastructure on economic growth and convergence

    Alma Mačiulytė-Šniukienė   Affiliation
    ; Mindaugas Butkus   Affiliation
    ; Vida Davidavičienė Affiliation

Abstract

Core infrastructure, which covers transportation, information and communication (ICT), energy, water and sanitation systems, plays a significant role in economic growth. The development of core infrastructure – one of the European Union (EU) Cohesion Policy (CP) priorities – is heavily funded. However, it remains unclear whether these investments achieve the main aim, i.e. contribute to economic growth and convergence between EU countries and especially regions. A theoretical model addressing the identified issues is needed to assess the impact of infrastructure on economic growth and convergence comprehensively and as accurately as possible. To reach this aim, first, we have disclosed the definition of infrastructure and its structure. Also, we discussed different approaches to the relationship between infrastructure and economic growth. We developed a theoretical model for evaluating infrastructure impact on economic growth and convergence. Moreover, based on the neoclassical approach, we specified an econometric model that includes indicators of different types of infrastructure and assessed growth and convergence outcomes of infrastructure development. Even though we find that infrastructure positively affects growth and convergence, the estimated impact is not statistically significant except for some types of ICT and transport infrastructure.

Keyword : infrastructure, transport infrastructure, energy infrastructure, telecommunication infrastructure, water and sanitation infrastructure, economic growth, convergence

How to Cite
Mačiulytė-Šniukienė, A., Butkus, M., & Davidavičienė, V. (2022). Development of the model to examine the impact of infrastructure on economic growth and convergence. Journal of Business Economics and Management, 23(3), 731–753. https://doi.org/10.3846/jbem.2022.17140
Published in Issue
Jun 22, 2022
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This work is licensed under a Creative Commons Attribution 4.0 International License.

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