The Spillover Effects of Infrastructure Investments

Many Asian countries need infrastructure investment— highways, bridges, ports, and
and so on. However, their economic impact was not
well computed in the past. At the same time, their rate of
return was not large, that’s why bankable projects were
scarce. ADBI completed the research to
compute those spillover effects coming from infrastructure
investments. When a highway is completed,
many companies can locate along those highways, they can sell
their products, and employment in the region will benefit;
small businesses can start restaurants and so on. Those
impacts are called spillover effects after the completion of
highways or railways. ADBI has computed those impacts in
the case of a highway in Manila, Philippines, and railways in
Uzbekistan and Japan and other cases. And if these spillover
effects are returned to the infrastructure investors, the
rate of return will be much higher.

Paul Whisler

Leave a Reply

Your email address will not be published. Required fields are marked *