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Estimating causal effects of BRI infrastructure projects based on the synthetic control method

Abstract

This paper studies regional treatment effects of infrastructure projects on employment and transport volumes by combining quantitative econometric methods with qualitative case studies. The quantitative approach we use is the synthetic control method, which allows for the analysis of causal effects on particular treatment groups. The regions of interest in our study are Duisburg and Piraeus. Both quantitative and qualitative evidence reveal that the impact on maritime transportation in Piraeus is very significant. While the quantitative evidence shows a rather modest effect on employment before 2016, the qualitative evidence suggests a more significant effect in recent years. We interpret this as the postponed effects from infrastructure provision on various outcome variables. Moreover, we find that rail transport does not crowd out local road transport.

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Notes

  1. Notice that there are opposing effects that work into the opposite direction. A higher population density lowers the living standards in cities or regions. Higher pollution and less space increase the neighboring regions’ attractiveness.

  2. NUTS is characterized as “a hierarchical system for dividing up the economic territory of the EU for the purpose of: The collection, development and harmonization of European regional statistics, [s]ocio-economic analyses of the regions [..., and] [f]raming of EU regional policies” (Eurostat 2019)

  3. Extensive summary statistics are displayed in Table 5.

  4. “NACE is the acronym used to designate the various statistical classifications of economic activities developed since 1970 in the European Union. NACE provides the framework for collecting and presenting a large range of statistical data according to economic activity in the fields of economic statistics (e.g. production, employment, national accounts) and in other statistical domains.” (Eurostat 2008, p. 13)

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Correspondence to Yuan Li.

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Table 5 Summary statistics

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Li, Y., Kleimann, M. & Schmerer, HJ. Estimating causal effects of BRI infrastructure projects based on the synthetic control method. Asia Eur J 19, 103–129 (2021). https://doi.org/10.1007/s10308-021-00621-7

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  • DOI: https://doi.org/10.1007/s10308-021-00621-7

Keywords

  • Belt and road initiative
  • Infrastructure
  • Development

JEL Classification

  • O52
  • O53
  • F00