Wider economic benefits of transport corridors: Evidence from international development organizations

Abstract

This paper collects data on transport corridor projects financed by the Asian Development Bank, Japan International Cooperation Agency, and World Bank and links them to a wider economic benefit—local economic activity. The paper uses the difference-in-differences methodology to link the variation in country and local initial conditions, and project characteristics to local economic activity. Construction of a new (greenfield) corridor is associated with higher growth in economic activity around the corridor than the rehabilitation or expansion of an existing corridor. Private sector involvement in the operation and management of infrastructure is associated with lower growth in economic activity along the corridors. In the short to medium term, corridor investments with a larger geographic scope are associated with increased growth in economic activity along them, while in the long term, there is no significant difference relative to smaller-scope corridor investments. The initial conditions do not seem to influence how corridor investments affect the growth in economic activity.