Estimating the Impacts of Transport Corridor Development in Kazakhstan : Application of Dynamic Panel Data Models to Firm Registry Data
Large-scale transport infrastructure investment can facilitate structural transformation by changing firm behavior. Although its impact is evident over the long term, an important empirical challenge is potential endogeneity of infrastructure placement. By using the dynamic panel data regression, the paper examines the impacts of massive road corridor investment under the Nurly Zhol program in Kazakhstan. The paper takes advantage of detailed micro shipping data to capture historical changes in transport connectivity over the past 10 years. While the average travel speed has slightly increased, transport costs have been nearly halved. The estimated translog cost functions indicate that local market accessibility is the most important factor to boost firm productivity. The elasticity was 0.24 in absolute terms. Inventory is found to be a major cost factor for firms. It is found that a 10-percent improvement in accessibility to large cities, such as Astana and Almaty, could allow firms to reduce their inventory by 8.7 percent. The market accessibility is found to foster firm agglomerations, but agglomeration economies do not seem to translate into higher firm productivity. This is possibly because the Kazakh economy still lacks effective forward or backward linkages across industries.
| Main Author: | |
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| Format: | Working Paper biblioteca |
| Language: | English English |
| Published: |
World Bank, Washington, DC
2022-09
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| Subjects: | TRANSPORT INFRASTRUCTURE, INFRASTRUCTURE INVESTMENT, ENDOGENEITY, MARKET ACCESS, FIRM PRODUCTIVITY, TRANSPORT CONNECTIVITY, FIRM INVENTORY, COST FUNCTION, AGRICULTURE PRODUCTION, DYNAMIC PANEL REGRESSION, |
| Online Access: | http://documents.worldbank.org/curated/en/099313309292296795/IDU0c68da3b7061a6042a80b39f0fcd67f3dea5f http://hdl.handle.net/10986/38096 |
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| Summary: | Large-scale transport infrastructure
investment can facilitate structural transformation by
changing firm behavior. Although its impact is evident over
the long term, an important empirical challenge is potential
endogeneity of infrastructure placement. By using the
dynamic panel data regression, the paper examines the
impacts of massive road corridor investment under the Nurly
Zhol program in Kazakhstan. The paper takes advantage of
detailed micro shipping data to capture historical changes
in transport connectivity over the past 10 years. While the
average travel speed has slightly increased, transport costs
have been nearly halved. The estimated translog cost
functions indicate that local market accessibility is the
most important factor to boost firm productivity. The
elasticity was 0.24 in absolute terms. Inventory is found to
be a major cost factor for firms. It is found that a
10-percent improvement in accessibility to large cities,
such as Astana and Almaty, could allow firms to reduce their
inventory by 8.7 percent. The market accessibility is found
to foster firm agglomerations, but agglomeration economies
do not seem to translate into higher firm productivity. This
is possibly because the Kazakh economy still lacks effective
forward or backward linkages across industries. |
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