Estimating causal effects of BRI infrastructure projects based on the synthetic control method

Abstract

This paper studies regional treatment effects of infrastructure projects on employment and transport volumes by combining quantitative econometric methods with qualitative case studies. The quantitative approach we use is the synthetic control method, which allows for the analysis of causal effects on particular treatment groups. The regions of interest in our study are Duisburg and Piraeus. Both quantitative and qualitative evidence reveal that the impact on maritime transportation in Piraeus is very significant. While the quantitative evidence shows a rather modest effect on employment before 2016, the qualitative evidence suggests a more significant effect in recent years. We interpret this as the postponed effects from infrastructure provision on various outcome variables. Moreover, we find that rail transport does not crowd out local road transport.