regulation, organization of firms, and domestic rivalry. The study argues that – besides skilled labor – the availability of infrastructure systems is a key factor of production that determines the competitiveness of firms and thus entire economies.

This notion has been confirmed by a wide range of studies focusing on the role of infrastructure: Calderón and Servén (2014) review the literature on infrastructure and economic growth. Overall, both theoretical and empirical literature are concluded to find positive impacts of infrastructure development on growth and even distributive equity. Bom and Ligthart (2014) conduct a meta‐regression of 68 quantitative studies that all use a production function approach to quantify the impact of public infrastructure capital on GDP. This review included studies published between 1983 and 2008, predominantly considering developed economies countries. Through a weighted meta‐regression, the authors estimate an average elasticity of output with respect to public capital. Their assessment suggests that, on average, a 1% increase in public infrastructure capital is associated with an increase in GDP of 0.1%.

A large body of literature assesses the relationship between infrastructure and economic performance by considering a country’s infrastructure stock. In these studies, infrastructure availability is typically assessed in terms of its provided quantity, approximated for example by the total length of paved roads or phone lines in a given country. By considering the variation in infrastructure stocks across countries and time, these studies have shown a significant positive impact of infrastructure availability on various indicators of economic performance.

For instance, Straub and Terada‐Hagiwara (2010) conduct an in‐depth empirical analysis of infrastructure quality and growth, focusing on developing Asia. For this purpose, they use a range of physical infrastructure stock indicators covering telecommunications, energy, transport, and water for 102 countries, including 23 in South and East Asia, and the Pacific. They find that improvement of a country’s infrastructure base correlates significantly with higher economic growth. Similarly, using a large dataset on infrastructure stocks covering 88 developing and industrial countries and the period from 1960 to 2000, Calderón, Moral‐Benito, and Servén (2014) show that the output contribution of infrastructure is highly significant. According to their estimates, an increase in infrastructure provision from a typical lower‐ middle income country (e.g. Bolivia in 2000) to an upper‐middle income country (e.g. Uruguay) increases output per worker by 5 percent.

The same positive impact of infrastructure investments is found in studies investigating individual countries at different income levels. A prominent study by Aschauer (1989) finds that public investment in US infrastructure has a significant positive effect on total factor productivity. In particular, investments in ‘core’ infrastructure such as transport, electricity, gas, water, and sanitation are found to have the strongest explanatory power for productivity. For a 30 year‐long panel of South African manufacturing firms, Fedderke and Bogetić (2009) find a positive and significant impact of investments in different types of transport, telecommunication, and power generation infrastructure, on measures on productivity, output, and growth. Similarly, Mitra, Sharma, and Végantonès‐Varoudakis (2016) analyze Indian manufacturing firms and find a strong positive impact of the availability of transport, information and communication technology infrastructure on firms’ productivity. The size of this effect is larger in industries with greater exposure to foreign competition, thus highlighting the link between competitiveness and infrastructure stocks.

Further studies offer evidence of the economic contribution of specific infrastructure systems, in particular power, transport, ICT, and water.

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