The Economic Effects of Infrastructure on the Prefecture Level in China, Evidence from Historic and Modern Data

Yuan, Zhe
(2021) The Economic Effects of Infrastructure on the Prefecture Level in China, Evidence from Historic and Modern Data. PhD thesis, University of Liverpool.

[img] Text
200687693_Nov2021.pdf - Unspecified

Download (4MB) | Preview


This dissertation comprises three essays that examine the economic effects of three different infrastructure types. In this dissertation, the author aims to find the initial incentive for the decision makers to build an infrastructure. The first essay uses the fixed effects model to examine the effects of the Grand Canal and major waterways on the wheat market integration in the mid-Qing period. Applying the methodology of Donaldson (2018), it demonstrates that the wheat price in cities along all waterways, including the Grand Canal, weakly responded to local weather conditions and strongly to price fluctuations in neighbouring cities. The second essay implements a quantitative method to investigate the transport efficiency and economic efficiency of urban rail transportation (URT) systems across Chinese cities. The Data Envelopment Analysis (DEA) is employed to generate production frontiers for economic and transport outcomes, one producing transportation turnover and the other serving economic objectives. After deriving the economic and transport efficiency, the essay uses the Tobit regression to estimate the factors affecting efficiency. The analysis clearly demonstrates that the URT infrastructure is more efficient at transporting passengers in the first-tier cities in China, but does a better job at improving GDP and economic attractiveness in other cities. The evidence thus, ex-post, suggests that the primary goal of building a URT might not be same for the policy makers in different sized cities. The third chapter estimates the effects of opening new airports on employment in 19 different sectors using prefecture level data from 2003 to 2018. By using difference in difference (DID) specification, it is found that the airport openings mainly brought significant growth in two sectors, wholesale & retail and transport & warehousing in the whole prefecture region. No significant signs were found in other sectors and the total employment. These findings could be attributed to the heterogeneous dependences of each sector on air traffic. To deal with endogeneity, an instrument variable estimated by distances to the nearest hub airport and the location of military airport is generated. The two- stage-least-square (2SLS) regression with instrument Variable (IV) suggests that the baseline model underestimate the significant effects on the wholesale & retail and transport & warehousing sectors.

Item Type: Thesis (PhD)
Uncontrolled Keywords: Infrastructure, Qing Grain Price, the Grand Canal, Urban Rail transit, Efficiency, DEA-Tobit, Airport, Employment, DID
Divisions: Faculty of Humanities and Social Sciences > School of Management
Depositing User: Symplectic Admin
Date Deposited: 09 Feb 2022 16:55
Last Modified: 18 Jan 2023 21:17
DOI: 10.17638/03146172
  • He, Ming
  • Li, Yuyi
  • Fang, Eddy