Abstract
This paper examines the link between the transport infrastructure and the economic performance in the EU-28 countries, over the period of time 2000–2014, using panel data methods. Firstly, we aim to provide the theoretical background of the transport infrastructure development, public sector performance and economic growth. The paper's key point is the detailed look at the components of transport infrastructure, analyzing the implications of the policy-makers based on a production function and in order to test the policy implication, factor analysis is also employed. The results show significant effects from transport infrastructure components even after institutional and other factors are controlled for. From the path analysis results, the study confirm the alternative hypothesis, outlining the unidirectional long-run causality relationship between growth, transport infrastructure and Public Sector Performance. Transport infrastructure status (measured thought index of transport) has significant impact on economic development with coefficient estimate. The public performance indicators influence the way to economic growth. On the one hand, the corruption, the regulatory environment, size shadow economy, infant mortality, income inequality, inflation and unemployment rate negatively affect the economic growth, and on the other hand there is a strong positive relationship between the quality of the judiciary, education achievement, life expectancy and economic growth.
Highlights
The transport infrastructure in all 28 countries of the European Union (EU-28) has undergone the fastest development in the last decades, and the impact of the transportation on sustainable development and economic growth has become a concern for policy-makers as well for economists or entrepreneurs
The paper contributes to the literature on the transport-led economic growth hypothesis because there are few studies examining the relationship between the transport infrastructure and the economic growth at the level of the EU-28 over the recent years taking into account the period of global crisis, the diversities of the economies in the structure and the most important, this study it is the first one that analyses from the perspective of public sector performance status
As far as Public policies are often made without much reliance on economic reasoning, policy changes, institutional arrangements and the incentives guided by political stakes can negatively impact the status of transport infrastructure development and the way to sustainable growth
Summary
The transport infrastructure in all 28 countries of the European Union (EU-28) has undergone the fastest development in the last decades, and the impact of the transportation on sustainable development and economic growth has become a concern for policy-makers as well for economists or entrepreneurs. Completing the existing studies, this paper explores the interdependence between economic growth, transport infrastructure and policy implication, from the point of public sector performance status in the EU-28 over the period of time 2000–2014. By the fact that it is necessary to create commonality and to apply growth equation by taking care of spuriously implication in the model results Another novelty aspect of this research is the development of a transport index. In this context, the paper contributes to creating a comprehensive view on the relationship between the transport infrastructure developments, public performance and economic growth, considering that can bring added value in the field of the literature. The results can be usefully in supporting the future decisions in terms of public-private partnership or investments in transport infrastructure, and reflect the need for consolidating a viable strategy that makes the poor public policy outcomes more responsive
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