Non-linear Effects of Investment in Road Infrastructure on the Structural Competitiveness of the Economy: The Case of Burkina Faso
International Journal of Economics, Finance and Management Sciences
Volume 8, Issue 3, June 2020, Pages: 98-107
Received: May 15, 2020; Accepted: May 29, 2020; Published: Jun. 8, 2020
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Sigue Moussa, Department of Economics and Management, University Ouaga II, Ouagadougou, Burkina Faso
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Abstract
This article assesses the non-linear effects of investment in road infrastructure on the structural competitiveness of the economy of Burkina Faso. After selecting a period from 1980 to 2015, we estimated two econometric models. These are the quadratic estimation and that of the spline. The results obtained revealed a non-linearity between the structural competitiveness of the economy and investment in road infrastructure. Indeed, the quadratic estimation made it possible to identify a non-linearity in the shape of an inverted U with an optimal threshold of 10.11%. Regarding the spline estimation, it provided an optimal interval of [5%; 15%]. In this interval, a 1% increase in investment in road infrastructure improves structural competitiveness by 0.018%. However, beyond 15%, a 1% increase in investment in road infrastructure leads to a decrease in structural competitiveness by 0.013%. In view of these results, the implication of economic policy that emerges is that in order to benefit from optimal structural competitiveness, the share of investment in road infrastructure in the total investment budget must be between 5% and 15%.
Keywords
Structural Competitiveness, Investment in Road Infrastructure, Non-linearity, Burkina Faso
To cite this article
Sigue Moussa, Non-linear Effects of Investment in Road Infrastructure on the Structural Competitiveness of the Economy: The Case of Burkina Faso, International Journal of Economics, Finance and Management Sciences. Vol. 8, No. 3, 2020, pp. 98-107. doi: 10.11648/j.ijefm.20200803.12
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Copyright © 2020 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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