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An empirical investigation of the link between infrastructure development and poverty reduction Chotia, Varun; Rao, NVM . International Journal of Social Economics ; Bradford  Vol. 44, Iss. 12,  (2017):

1906-1918.

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ABSTRACT (ENGLISH) Purpose

India is a developing nation where the marginal benefit of infrastructure development is tremendous. The purpose

of this paper is to analyze the relationship between infrastructure development and poverty reduction for India

using the yearly data from 1991 to 2015.

Design/methodology/approach

The authors use the principal component analysis to construct indices for four major sub-sectors, namely,

transport, water and sanitation, telecommunications and energy, falling under the broad infrastructure sector and

then using these sectorwise indices, the authors construct an overall index which represents infrastructure

development. The authors provide evidence on the link between infrastructure development and poverty reduction

by using the auto regressive distributed lag (ARDL) bound testing approach.

Findings

The ARDL test results suggest that infrastructure development and economic growth reduce poverty in both long

run and short run. The causality test confirms that there is a positive and unidirectional causality running from

infrastructure development to poverty reduction.

Research limitations/implications

The study confirms that India's Infrastructure development plays a vital role in reducing poverty and calls for the

Indian Government to adopt economic policies which are aimed at developing and strengthening the infrastructure

levels and bringing in more investment in the infrastructure sector in order to help the poor population by making

them exposed to better opportunities of employment and income growth, thereby achieving the goal of poverty

reduction.

Originality/value

This paper is a fresh and unique attempt of its kind to empirically investigate the causal relationship between

infrastructure development and poverty reduction in India using modern econometric techniques. DETAILS

LINKS Linking Service

Subject: Poverty; Cointegration analysis; Productivity; Transport; Causality; Studies;

Investment; Economic growth; Telecommunications; Sanitation; Economic models;

Employment; Principal component analysis; Infrastructure

Location: India

Publication title: International Journal of Social Economics; Bradford

Volume: 44

Issue: 12

Pages: 1906-1918

Number of pages: 13

Publication year: 2017

Publication date: 2017

Publisher: Emerald Group Publishing Limited

Place of publication: Bradford

Country of publication: United Kingdom, Bradford

Publication subject: Business And Economics, Sociology

ISSN: 03068293

Source type: Scholarly Journals

Language of publication: English

Document type: Journal Article

ProQuest document ID: 1962210357

Document URL: https://search.proquest.com/docview/1962210357?accountid=28903

Copyright: © Emerald Publishing Limited 2017

Last updated: 2017-11-10

Database: ProQuest Central

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