1 RUHR ECONOMIC PAPERS Philipp Breidenbach Timo Mitze The Long Shadow of Port Infrastructure in Germany Cause or Consequence of Regional Prosperity? #420
2 Imprint Ruhr Economic Papers Published by Ruhr-Universität Bochum (RUB), Department of Economics Universitätsstr. 150, Bochum, Germany Technische Universität Dortmund, Department of Economic and Social Sciences Vogelpothsweg 87, Dortmund, Germany Universität Duisburg-Essen, Department of Economics Universitätsstr. 12, Essen, Germany Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI) Hohenzollernstr. 1-3, Essen, Germany Editors Prof. Dr. Thomas K. Bauer RUB, Department of Economics, Empirical Economics Phone: +49 (0) 234/ , Prof. Dr. Wolfgang Leininger Technische Universität Dortmund, Department of Economic and Social Sciences Economics Microeconomics Phone: +49 (0) 231/ , Prof. Dr. Volker Clausen University of Duisburg-Essen, Department of Economics International Economics Phone: +49 (0) 201/ , Prof. Dr. Christoph M. Schmidt RWI, Phone: +49 (0) 201/ , Editorial Offi ce Sabine Weiler RWI, Phone: +49 (0) 201/ , Ruhr Economic Papers #420 Responsible Editor: Christoph M. Schmidt All rights reserved. Bochum, Dortmund, Duisburg, Essen, Germany, 2013 ISSN (online) ISBN The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors own opinions and do not necessarily reflect those of the editors.
3 Ruhr Economic Papers #420 Philipp Breidenbach and Timo Mitze The Long Shadow of Port Infrastructure in Germany Cause or Consequence of Regional Prosperity?
4 Bibliografische Informationen der Deutschen Nationalbibliothek Die Deutsche Bibliothek verzeichnet diese Publikation in der deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über: abrufbar. ISSN (online) ISBN
5 Philipp Breidenbach and Timo Mitze 1 The Long Shadow of Port Infrastructure in Germany Cause or Consequence of Regional Prosperity? Abstract Transport infrastructure is viewed as an important determinant of regional growth and development. While this prediction especially holds from a theoretical perspective based on endogenous growth theories, from an empirical perspective it is not easy to verify this causal link, though. The main reason for this difficulty is that it is hard to measure whether transport infrastructure is indeed the exogenous driver of regional development or whether it is rather an endogenous reflection of the higher transportation demand in prospering regions. In this paper, we analyse the long-run effect of port facilities on regional income levels in Germany. Since it is very likely that the reversed causality problem applies to our sample setting, we use an identification strategy that is based on exogenous longrun instruments. In particular, port facilities built before the industrial revolution (about 1850 in Germany) can be seen as an adequate instrument for current port infrastructure since they are exogenous to recent economic development. Using German regional data for , our results hint at a positive correlation between port locations and regional per capita GDP, but do not provide evidence for a causal relationship. For the regional variation of population levels as a more general indicator for agglomeration effects, the causal relationship running from port infrastructure provision to increasing population levels holds nonetheless. JEL Classification: C26, R12, R40 Keywords: Port infrastructure; regional income; causal effects; IV July Philipp Breidenbach, RWI; Timo Mitze, University of Southern Denmark and RWI. The authors are grateful to Alfredo Paloyo and Christoph M. Schmidt for helpful comments that helped to improve this manuscript. All correspondence to Philipp Breidenbach, RWI, Hohenzollernstr. 1-3, Essen, Germany,
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