Infrastructure and Economic Growth: Panel Analysis of Selected Asian Countries

Abstract

Effective and reliable infrastructure is considered helpful for economic growth. Particularly, transport infrastructure is an important factor in the development of countries. The infrastructure can be classified into different dimensions i.e. economic and social infrastructure. The current study uses panel analysis techniques to examine the association between infrastructure and economic growth. The panel data is used having a period from 2000-2020 for selected Asian countries. Panel unit root tests are applied to check the stationarity of the data, and findings depict that all variables are stationary at the first difference. After analyzing the unit root properties, the Pedroni cointegration technique is employed to assess the long-run association. The results indicate that all variables have an association in the long run. Furthermore, the Random effect model is employed for empirical investigations. The results concluded that transport infrastructure, energy use, and communication infrastructures positively affect the economic growth in the selected Asian countries. It is recommended that the government stress public expenditure to ensure effective infrastructure, promoting economic growth. It is also suggested that more budget may be consumed to make the roads, dams, telecommunication services, and bridges.