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Non-linear Effects of Investment in Road Infrastructure on the Structural Competitiveness of the Economy: The Case of Burkina Faso

Received: 15 May 2020     Accepted: 29 May 2020     Published: 8 June 2020
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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%.

Published in International Journal of Economics, Finance and Management Sciences (Volume 8, Issue 3)
DOI 10.11648/j.ijefm.20200803.12
Page(s) 98-107
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

Structural Competitiveness, Investment in Road Infrastructure, Non-linearity, Burkina Faso

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  • APA Style

    Sigue Moussa. (2020). 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, 8(3), 98-107. https://doi.org/10.11648/j.ijefm.20200803.12

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    ACS Style

    Sigue Moussa. Non-linear Effects of Investment in Road Infrastructure on the Structural Competitiveness of the Economy: The Case of Burkina Faso. Int. J. Econ. Finance Manag. Sci. 2020, 8(3), 98-107. doi: 10.11648/j.ijefm.20200803.12

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    AMA Style

    Sigue Moussa. Non-linear Effects of Investment in Road Infrastructure on the Structural Competitiveness of the Economy: The Case of Burkina Faso. Int J Econ Finance Manag Sci. 2020;8(3):98-107. doi: 10.11648/j.ijefm.20200803.12

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  • @article{10.11648/j.ijefm.20200803.12,
      author = {Sigue Moussa},
      title = {Non-linear Effects of Investment in Road Infrastructure on the Structural Competitiveness of the Economy: The Case of Burkina Faso},
      journal = {International Journal of Economics, Finance and Management Sciences},
      volume = {8},
      number = {3},
      pages = {98-107},
      doi = {10.11648/j.ijefm.20200803.12},
      url = {https://doi.org/10.11648/j.ijefm.20200803.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20200803.12},
      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%.},
     year = {2020}
    }
    

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    T1  - Non-linear Effects of Investment in Road Infrastructure on the Structural Competitiveness of the Economy: The Case of Burkina Faso
    AU  - Sigue Moussa
    Y1  - 2020/06/08
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    DO  - 10.11648/j.ijefm.20200803.12
    T2  - International Journal of Economics, Finance and Management Sciences
    JF  - International Journal of Economics, Finance and Management Sciences
    JO  - International Journal of Economics, Finance and Management Sciences
    SP  - 98
    EP  - 107
    PB  - Science Publishing Group
    SN  - 2326-9561
    UR  - https://doi.org/10.11648/j.ijefm.20200803.12
    AB  - 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%.
    VL  - 8
    IS  - 3
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Author Information
  • Department of Economics and Management, University Ouaga II, Ouagadougou, Burkina Faso

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