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Connective Financing - Chinese Infrastructure Projects and the Diffusion of Economic Activity in Developing Countries

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  • Richard Bluhm
  • Axel Dreher
  • Andreas Fuchs
  • Bradley C. Parks
  • Austin M. Strange
  • Michael J. Tierney

Abstract

This paper studies the causal effect of transport infrastructure on the spatial distribution of economic activity within subnational regions in a large number of developing countries. To do so, we introduce a new global dataset of geolocated Chinese development finance projects over the period from 2000 to 2014 and combine it with measures of spatial concentration based on remotely-sensed data. We find that Chinese-financed transportation projects reduce spatial concentration within regions. Transport projects decentralize economic activity particularly strongly in regions that are more urbanized, located closer to a city, and less developed. .

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  • Richard Bluhm & Axel Dreher & Andreas Fuchs & Bradley C. Parks & Austin M. Strange & Michael J. Tierney, 2020. "Connective Financing - Chinese Infrastructure Projects and the Diffusion of Economic Activity in Developing Countries," CESifo Working Paper Series 8344, CESifo.
    • Handle: RePEc:ces:ceswps:_8344
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    More about this item

    Keywords

    development finance; transport costs; infrastructure; foreign aid; spatial concentration; China;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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