ANNALS OF ECONOMICS AND FINANCE 9-2, 345–371 (2008) Transport Infrastructure, Growth, and Poverty Alleviation: Empirical Analysis of China*

Using panel data of 1994-2002, as well as time series data of 1978-2002 in China, this paper examines the effect of transport infrastructure on economic growth and poverty alleviation, and finds out that the higher growth level in East and Central China comes, to a great extent, from better transport infras-tructure. It turns out by Granger-test that transport investment especially that on roads constitutes a source of growth, but not vice versa. We compare the different effect of railways and roads in different regions, and find out that public investment on road construction in poor areas is of drastic importance to growth and poverty alleviation, and therefore should be a priority of policy choice