Thursday, November 15, 2018

Chinese Infrastructure Projects and Economic Spillover Effects

AIDDATA, a research lab at William and Mary, published in September 2018 a study titled "Connective Financing: Chinese Infrastructure Projects and the Diffusion of Economic Activity in Developing Countries" by a team of experts.

The authors analyze infrastructure projects on the spatial distribution of economic activity within host countries, including Africa. They found that Chinese development projects in general, and Chinese transportation projects in particular, reduce economic inequality within and between sub-national localities. Their results suggest that Chinese investments in connective infrastructure produce positive economic spillovers that lead to a more equal distribution of economic activity in the localities where they are implemented. On the other hand, these projects also bring some downsides.