Infrastructure and foreign trade elasticities: empirical evidence for China

  • Jefferson Souza Fraga Doutor em Economia-Universidade Federal de Minas Gerais
  • Helder Lara Ferreira-Filho Universidade de Brasília
Keywords: Infrastructure, export income elasticities and of imports, China


This article investigates the effect of infrastructure on the income elasticities of exports and imports for the Chinese economy, in the period 1981-2016, employing the Bayesian Model Averaging (BMA) technique. The results suggest that a better infrastructure promotes an increase in the income elasticity of exports and a decrease in the income elasticity of imports. The control variables – exchange rate, human capital, government consumption and institutional quality – increase the income-elasticity of exports, but have mixed results with respect to the income-elasticity of imports. Income elasticities were estimated applying the Kalman filter, which allows to obtain a time-varying estimate of the equilibrium growth rate of the balance of payments. Finally, the results show that infrastructure has a positive and significant long-term impact on the ratio of foreign trade elasticities in the Chinese economy.


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How to Cite
Souza Fraga, J., & Lara Ferreira-Filho, H. (2022). Infrastructure and foreign trade elasticities: empirical evidence for China. Brazilian Keynesian Review, 8(1), 34-71.