The relationship between economic growth and road infrastructure: evidence from Turkey

Abstract

By common consent, governments want to increase their economic e ciencies, productivities, citizens' level of incomes and welfare and quality of their lives. Infrastructure investmens are prominent factors to boost the growth of the economies. In the aspect of infrastructure, transportation investments are also important for economic growths. Because people can reach education, health services and gain social bene ts by using transportation networks. Measuring the impact of transportation investments on economic growth is important, gathering substantial results are important tools for policy makers, decision makers and development planners. There are studies to measure how much these bene ts are gained by transport infrastructure expansions in many countries. The goal of this study is to achieve concrete evidences whether if road infrastructure expansion is e ective or not in economic basis in Turkey for the country and provincial levels. To achieve this aim, two di erent econometric analyses are examined. Data is gathered from TURKSTAT, Directorate of Highways, Ministry of Development, TEPAV databases. Road infrastructure capital stocks and road density changes per capita values are used as main explanatory variables in terms of road infrastructure concept. Initial econometric analysis is performed at country based level with a Cobb-Douglas production function. In the last analysis, panel data approach is used on the Solow type growth framework. Results show that the road capital stock or road density per capita changes are not signi cant in determining the increase of the GDP levels for Turkey. If there is an existing su cient capacity, an additional road creates less marginal bene t for the welfare. Also, alternative transportation instruments should also be considered for related future studies.