Estimation on Regional Benefit and Optimal Level of Road Capital Stock
Publication: Journal of Infrastructure Systems
Volume 8, Issue 3
Abstract
This paper measures the regional benefit of road investment in Korea, using the translog cost functions of the manufacturing industry for the four macroregions of Seoul Metropolitan Area, South-Eastern Area, South-Western Area, and Central Area. This paper shows that the road capital contributes significantly to the productivity of the manufacturing industry in the sense that the magnitude of the road capital stock elasticity of the production cost at the national level is The net social rate of return for all regions is higher than the yield of corporate bonds, which implies that the road capital stock is undersupplied in Korea. The ratio of optimal to actual road capital stock declined from 1986 to 1991, and then increased in all regions except Seoul Metropolitan Area since 1992. In order to generate economic efficiency and regional equality, it is necessary to increase road capital investment in the less developed regions of Korea, such as the South-Western Area and the Central Area.
Get full access to this article
View all available purchase options and get full access to this article.
References
Bergman, E. M., and Sun, D. (1996). “Infrastructure and manufacturing productivity: Regional accessibility and development level effects.” Infrastructure and the complexity of economic development, D. F. Batten and C. Karlsson, eds., Springer, New York, 17–35.
Berndt, E. R., and Hansson, B. (1991). “Measuring the contribution of public infrastructure capital in Sweden.” NBER Working Paper No. 3842, National Bureau of Economic Research, Cambridge, Mass.
Conrad, K.(1997). “Traffic, transportation, infrastructure and externalities: A theoretical framework for a CGE analysis.” Ann. Regional Sci., 31(4), 369–389.
Costa, J. S., Ellson, R. W., and Martin, R. C.(1987). “Public capital, regional output, and development: Some empirical evidence.” J. Regional Sci., 27(3), 419–437.
Dufy-Deno, K. T., and Eberts, R. W.(1991). “Public infrastructure and regional economic development: A simultaneous equations approach.” J. Urban Econ., 30(3), 329–343.
Greene, D. L., and Jones, D. W. (1997). “Full benefits and costs of transportation: Conceptual and theoretical issues.” The full costs and benefits of transportation, D. L. Greene, D. W. Jones, and M. A. Delucchi, eds., Springer, New York, 1–26.
Jeong, J. (2000). “Road investment and productivity growth.” The forum on analysis of effects of road investment, Korea Research Institute for Human Settlements, Seoul, 23–40.
Keeler, T. E., and Ying, J. S.(1988). “Measuring the benefits of a large public investment.” J. Public Econ., 36(1), 69–85.
Kim, E.(1998). “Economic gain and loss of public infrastructure investment: Dynamic computable general equilibrium model approach.” Growth and Change, 29(4), 445–468.
Kim, E., and Lee, H. (1998). “Special integration of urban water services and economies of scale.” Rev. Urban Regional Devel. Studies, 10(1), 3–18.
Lakshmanan, T. R., Nijkamp, P., and Verhoef, E. (1997). “Full benefits and costs of transportation: Review and prospects.” The full costs and benefits of transportation, D. L. Greene, D. W. Jones, and M. A. Delucchi, eds., Springer, New York, 387–406.
Lynde, C., and Richmond, J.(1992). “The role of public capital in production.” Rev. Econ. Stat., 74(1), 37–44.
Lynde, C., and Richmond, J.(1993). “Public capital and long-run costs in U.K. manufacturing.” Econom. J., 103, July, 880–893.
Nadiri, M. I., and Mamuneas, T. P. (1996). Contribution of highway capital to industry and national productivity growth, New York Univ. and NBER Univ. of Cyprus, New York.
Park, S., and Lee, S. (1996). Optimum scale and expansion of infrastructure provision, Samsung Economic Research Institute, Seoul.
Rietveld, P.(1989). “Infrastructure and regional development.” Ann. Regional Sci., 23(2), 255–274.
World Bank. (1994). World development report 1994, infrastructure for development, Oxford Univ. Press, New York.
Information & Authors
Information
Published In
Copyright
Copyright © 2002 American Society of Civil Engineers.
History
Received: Jul 30, 2001
Accepted: Feb 28, 2002
Published online: Aug 15, 2002
Published in print: Sep 2002
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.