Economic and Mathematical Modeling of the Direct Effects of Large-Scale Infrastructure Projects on Developing Territories

Abstract

The problem of assessing the effects of infrastructure projects for territories is debatable. Modeling experience has been accumulated today, and elaborated macroeconomic models allow to identify causal relationships between the indicators of transport development and economic growth. The goal of this article is to define a simulation model of assessing the impact of transport projects on the economic growth of Krasnodar Krai exemplified by the Crimean Bridge project. The solution of this scientific problem requires taking into account different factors and complicated interrelationships within the framework of the regional social and economic system under consideration, using methods of system analysis and tools of economic and mathematical simulation. The simulation model reflects the scenario parameters of the capital management policy, highway transport freight turnover, highway transport freight turnover directly connected with the construction of Kerch Straight Bridge, carriage of goods by railway transport, carriage of goods by railway transport directly connected with the construction of Kerch Straight Bridge. The interrelations of this model’s parameters are established by the econometrics methods. In accordance with the produced scenarios the expected median values of the additional increment of the Krasnodar Krai GRP due to the increment of transportation associated with the Crimean Bridge operation are in the range between 0.97 % and 1.1 %. The most conservative scenario presumes the median value of 0.97 % and lower limit of 0.8 %. This tool can be used to assess the direct effect of railway and road construction for other Russian regions. The proposed simulation model will be further expanded by including further distribution functions of scenario variables and additional structural relationships.