2023-07-10-ADB-Infrastructure_Spillover_Impacts_in_Developing_Asia_239页_11mb

Summary of Infrastructure Spillover Impacts in Developing Asia

Core Content

This document explores the spillover impacts of various types of infrastructure—ICT, transport, and water supply—on economic growth, firm performance, and public policy in developing Asian countries. It is a compilation of research findings and policy recommendations based on empirical and theoretical analyses conducted by experts from the Asian Development Bank Institute (ADBI) and other institutions.

The book is structured into three parts:

• Part I: ICT Infrastructure
• Part II: Transport and Water Infrastructure
• Part III: Infrastructure and Firm Performance

It emphasizes the importance of digital and physical infrastructure in driving economic recovery, sustainable development, and private sector participation in infrastructure investment. The spillover effects of infrastructure are analyzed through data-driven approaches, theoretical models, and policy frameworks.

Main Chapters and Key Findings

Part I: ICT Infrastructure

Chapter 1: Spillover Effects of ICT Infrastructure: Empirical Evidence from India

• Focus: Analyzes the spillover effects of ICT infrastructure on tax revenues in India.
• Methodology: Uses fixed effects (FE) and FE two-stage least squares (2SLS) estimations with state-level data from 2005 to 2016.
• Findings:
  • An increase in mobile network subscribers is associated with a 3% increase in state tax revenue per capita.
  • GSM subscribers contribute to economic activity and tax revenue through enhanced connectivity and productivity.
  • Policy Recommendation: Governments should share increased tax revenues with private investors to create a steady income stream and support digital and physical infrastructure in the national budget.

Chapter 2: ICT and Labor Mobility: Online Search and Prediction of Remittances in the Kyrgyz Republic

• Focus: Examines the role of ICT in labor mobility and remittance prediction.
• Methodology: Uses Google Trends Index and gravity model with search keywords from Kyrgyz Republic and six destination countries.
• Findings:
  • Search keywords in destination countries have a greater impact on remittances than those in the Kyrgyz Republic.
  • Migrant stock in destination countries significantly affects remittance flows.
  • ICT infrastructure enhances job creation and income transfers for migrant households.
• Policy Recommendation: Leverage ICT data to predict and manage remittances and improve labor mobility.

Chapter 3: Socioeconomic Spillover Effects of Digital Communications Infrastructure in India

• Focus: Reviews the definition and features of digital communications infrastructure (DCI) in India.
• Methodology: Uses empirical studies to analyze the spillover effects of DCI on GDP growth and socioeconomic outcomes.
• Findings:
  • DCI contributes to GDP growth and economic development.
  • Aadhaar and Unified Payment Interface (UPI) are highlighted as successful case studies of digital infrastructure spillovers.
  • Digital infrastructure has widespread socioeconomic impacts, including financial inclusion, agricultural productivity, and business efficiency.
• Policy Recommendation: Strengthen digital infrastructure to enhance economic inclusivity and socioeconomic development.

Part II: Transport and Water Infrastructure

Chapter 4: Cost-Benefit Analysis of Spillover Tax Revenues of High-Speed Rail in Taipei, China

• Focus: Analyzes the spillover tax revenues of high-speed rail (HSR) in Taipei, China.
• Methodology: Uses difference-in-difference (DID) and cost-benefit analysis.
• Findings:
  • Spillover tax revenues significantly enhance internal rate of return (IRR) for infrastructure projects.
  • Floating rate infrastructure bonds combined with land trust systems offer efficient financing.
  • Spillover tax revenues are essential in meeting infrastructure investment demands in Asia.
• Policy Recommendation: Implement innovative financing mechanisms and transparent cost-sharing schemes to attract private investment.

Chapter 5: Market Access and Firm Performance: Evidence Using Data from India

• Focus: Investigates the impact of improved road networks on firm profitability.
• Methodology: Uses district-level market access index and firm-level data from 2001 to 2015.
• Findings:
  • Better market access improves firm profitability and reduces return on assets (ROA) dispersion.
  • Night-time light data and geospatial tools are used to measure market access.
  • Improved connectivity leads to increased economic activity and firm performance.
• Policy Recommendation: Invest in transport infrastructure to enhance market access and firm competitiveness.

Chapter 6: The Spillover Effects of Water Supply Infrastructure Development: A Theoretical Model

• Focus: Constructs a theoretical model to explain the spillover effects of water supply infrastructure.
• Methodology: Uses tax revenue data and economic modeling.
• Findings:
  • Water supply infrastructure contributes to government tax revenue and private sector returns.
  • A pooling system is proposed to redistribute incremental tax revenues to private investors.
  • This system can reduce negative externalities and boost positive ones.
• Policy Recommendation: Implement pooling systems and transparent revenue-sharing mechanisms to enhance public-private cooperation in water and sanitation projects.

Part III: Infrastructure and Firm Performance

Chapter 7: The Role of Customs Quality for Exports: Empirical Evidence from Firm-Level Data from Belarus, Kazakhstan, and the Kyrgyz Republic

• Focus: Examines the impact of customs quality on export intensity.
• Methodology: Uses difference-in-difference (DID) approach with firm-level data from the World Bank Enterprise Survey.
• Findings:
  • Joining the Eurasian Economic Union (EAEU) improves export intensity.
  • The benefit varies across Belarus, Kazakhstan, and Kyrgyz Republic.
  • Customs efficiency is a key determinant of export performance.
• Policy Recommendation: Improve customs quality and border efficiency to boost export activities.

Chapter 8: Evaluating COVID-19's Impact on Firm Performance in Four CAREC Countries Using Night-Time Light Data

• Focus: Assesses the economic impact of the pandemic on firm performance using night-time light data.
• Methodology: Combines World Bank Enterprise Survey data with Google Earth and stringency index data.
• Findings:
  • Firm performance deteriorates with reduced night-time light intensity.
  • Larger firms are more likely to maintain performance during the pandemic.
  • Manufacturing, clothing, and services sectors experience greater decline in sales and demand.
  • Food sector firms perform better during the pandemic.
• Policy Recommendation: Use night-time light data to monitor economic activity and assess pandemic impacts on firm performance.

Key Information

• Spillover effects refer to the indirect economic benefits of infrastructure, such as increased tax revenues, improved market access, and enhanced firm performance.
• Digital technology plays a crucial role in enhancing transparency, reducing information asymmetry, and improving cost-sharing mechanisms.
• Private sector participation is essential for successful infrastructure development, and policy frameworks must support this through financial incentives and transparent governance.
• Data-driven analysis is emphasized, with the use of big data, geospatial tools, and night-time light intensity to quantify spillover effects.
• Sustainable infrastructure is a priority in developing Asia, with an estimated infrastructure investment gap of $1.7 trillion annually.

Policy Recommendations

• Support the development and maintenance of new and existing infrastructure, including digital and soft infrastructure.
• Encourage private sector investment through transparent cost-sharing, financial incentives, and innovative financing mechanisms.
• Use digital tools to monitor and manage infrastructure projects and spillover effects.
• Implement pooling systems for revenue sharing in water supply and transport projects.
• Improve customs efficiency and border management to enhance export performance.
• Leverage night-time light data and enterprise surveys to assess economic impacts of pandemics and policy changes.