The Impact Of Infrastructure Investment On Economic Growth Of Small,Developing Islands Of The Oceania

The thesis investigates the impact of infrastructure investment in small island developing states(SIDS)in the Pacific Oceania which are divided by the sea from the rest of the world,focusing on Fiji Islands,Tonga and Vanuatu,during the years 1995-2014.This study analyzes literature reviews of theoretical frameworks and empirical studies on infrastructure capitals and an econometric analysis of its impact in the case of the three countries.The Multiple Linear Regression(MLR)model is based on Cobb-Douglas Solow augmented growth theory where infrastructure capital determines economic growth.An additional panel regression model was also employed to prove the advantages of panel study for small islands data of the Oceania.The study includes real gross domestic product(GDP)as the dependent variable,while the gross fixed capital formation(GFCF),labour force(LF),the energy production(EN),telecommunications(TELE),transport proxy as number of tourists arrival(TR),the water supply(WS),the human capital proxy(EDU)in the regression models,respectively,are treated as independent variables.The overall findings reveal that there are in fact a correlation between infrastructure capitals and growth in the small islands.The results for each individual model of three countries show that telecommunication(TELE)is significant and positively associated to all of Fiji,Tonga and Vanuatu's economic growth supported by the increasing number of mobile subscriptions.EN on the other hand was found to be positive and significant in both Tonga and Vanuatu's growth while Fiji has negative result.This implies that both Tonga and Vanuatu increases focusing on the use of renewable resources,whereas Fiji needs to do so.By the results from additional panel regression,TR is positively significant in Fiji whereas WS is well significant in Tonga.This study suggests that transportation is advanced in Fiji and they should also focus on renewable resources to avoid relying on imported fuel and harming environments.The three countries should now focus on appropriate policies by assessing these impacts of infrastructure investments in PICs that are promoting both at national and international level.