Infrastructure And Economic Growth

In the economic sense, Infrastructure capital is formed by investment ininfrastructure and turned into resources in infrastructure industry. It is the basicmaterial safeguard of production and the basis for national economy development. Therelationship between infrastructure capital and economic growth has always been animportant issue in public economics. For a long time, transportation, energy and otherinfrastructure has been considered as the premise of economic growth and socialdevelopment. The theory about the positive significance of infrastructure capital oneconomic growth has been widely accepted, but in the empirical sense, the relatedresults are not consistent. A large number of studies show that infrastructure promoteeconomic growth, but some paper found that infrastructure is not significant oneconomic growth action, even that infrastructure hindered the economic growth. Afterthe reform and opening up, China’s economy has been growing rapidly, at the sametime, China’s infrastructure construction has been developed fast and made greatachievements (Zhang Jun,2007). Therefore, we make an empirical test of the impactof infrastructure on economic growth, based on the practice in the field ofinfrastructure construction in China.This test is important for evaluating theperformance of China’s infrastructure capital, the government’s economic developmentstrategy and improving macroeconomic management.Being different from previous studies, this paper divides infrastructure intoeconomic infrastructure and social infrastructure, then examines the relationshipbetween infrastructure and economic growth on two levels by using theprovincial-level data from2003to2011: firstly we study the relationship between thetotal infrastructure capital and economic growth, then we divide infrastructure, inspectthe economic growth effect of different types of infrastructure capital. We reach thefollowing conclusions:(1) Output elasticity of total infrastructure capital reached0.484, non-infrastructure capital output elasticity is0.206. By comparison, economicinfrastructure capital makes the biggest contribution to economic growth.(2) Different types of infrastructure capital have different consequences foreconomic growth. Social infrastructure plays a prominent role in economic growth. (3) There are regional differences in economic growth effect of economicinfrastructure and social infrastructure capital. The effect of economic infrastructure inthe western area is the most obvious, social infrastructure has the greatest impact onthe economy of the east...