Estimating Causal Effects of BRI Infrastructure Projects Based on the Synthetic Control Method
Railway connection does not necessarily crowd out the traffic of other transport modes.
We study the regional treatment effects of infrastructure projects on employment and transport volumes by combining the quantitative econometric method with qualitative case studies. The quantitative method we use is synthetic control, which allows us to analyze the causal effects on particular treatment groups. The regions of interest in our study are Duisburg and Piraeus. Both the quantitative and the qualitative evidence reveal that the impact on maritime transportation in Piraeus is very significant. Although the quantitative evidence shows a rather modest effect on employment before 2016, the qualitative evidence suggests a more significant effect in recent years. We interpret this as the postponed effects from infrastructure provision on various outcome variables. Moreover, we find that rail transport does not crowd out local road transport.
WORKING PAPER NO: 1180