The role of maritime, land, and air transportation in economic growth: Panel evidence from OECD and non-OECD countries

Accumulated evidence on the positive role of transport infrastructure has been fragmentally reported as an individual type of transport infrastructure—for example, roads, highways, railways, seaports and airports. Relatively few studies have compared the role of different types of transport infrastructure simultaneously. This study attempts to examine the role of various types of transport infrastructure in OECD and non-OECD countries by employing the hybrid production approach that combines macroeconomic growth with supply of and demand for transportation. The panel two-stage least squares method is used to estimate the parameters of economic growth and supply and demand functions, where transportation demand is represented by a principal component. The finding shows stronger significance of maritime transportation in economic growth than air and land transport. However, air and land transport are often irrelevant to or negatively affect economic growth, mostly in developing countries. In addition, the demand for transportation is driven by other social and economic factors apart from prices. Further implications are presented in the concluding remarks. Overall, this paper contributes to providing insights on how transport infrastructure affects economic growth in OCED and non-OECD countries.