Geoscience Reference
In-Depth Information
Transport
Infrastructure
Investments
Improved Freight / Service Attributes:
Lower Costs, Time-Savings,
More Reliability, New Services
Increased Accessibility, Specialization and Market Expansion
(Gains from Trade)
Improved
Labor Supply
Export & Import Expansion
and Competitive Pressures
Increasing Returns
to Scale
&
Spatial
Agglomeration
Effects
Innovation
&
Technical Diffusion
Economic
Restructuring
Exit/Entry of
Firms
Expanded
Production
TFP (Total Factor Productivity) & GDP Growth
Fig. 18.1 Transport infrastructures and economy-wide benefits
economic activities, thereby promoting a highly integrated national economy and
over time a globalized economy (Anderson and Lakshmanan 2007 ).
2. Technology Diffusion: Associated with the growth of interregional and cross-
country trade there has been an upsurge in intra-industry trade and the exchange
of intermediate goods. There are opportunities here for adopting new technical
knowledge associated with imports. There is potential for knowledge and techno-
logy growth in the process of 'learning by doing' and 'learning by using' , and
3. Gains from Agglomerations made possible by transport : In an increasingly
knowledge-intensive economy, some urban agglomerations enjoy increasing
returns in the form of dynamic location advantages, enabling innovation and
dynamic competitiveness of these cities. The three broad modeling approaches
which try to capture these advantages are:
(a) Economic Geography and Location Economics Models: The micro
foundations of the Marshall's ( 1890 ) agglomeration economies suggest
(a) input sharing among firms, (b) matchin g in metro areas of workers' skills
with the diverse requirements of employers, and (c) knowledge spillovers or
learning in these dense locations, with workers being the primary vehicles of
these transfers—such ideas further elaborated by Hoover ( 1948 ) and Isard
( 1956 ).
(b) New Economic Geography Model : Krugman ( 1991 ) applied a general equili-
brium modeling framework to the geography of the economy under
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