Do transport infrastructure spillovers matter for economic growth? Evidence on road and railway transport infrastructure in Iranian provinces

Abstract

This study analysed the spatial spillover effects of road and railway transport infrastructure on economic growth in the provinces of Iran. More specifically, it examined the direct, indirect (spatial spillover), and total effects of such infrastructure on the output growth of the provinces. To this end, maximum likelihood was used to estimate a spatial Durbin model for the provinces over the period 2001 to 2011. The results showed that main road and railway transport frameworks exert a positive and significant direct effect on the economic growth of the provinces. The main road and railway transport infrastructure in each province has a significant and positive indirect effect on the economic growth of the other provinces, indicating that improvements to individual infrastructure have spatial spillover effects on the economic growth of the other provinces. The conclusion drawn from these findings is that diffusion effects overcome agglomeration effects. Finally, total railway length has a positive spatial spillover effect on regional economic growth.