Using panel data of 1994-2002, as well as time series data of 1978-2002 in
China, this paper examines the effect of transport infrastructure on economic
growth and poverty alleviation, and finds out that the higher growth level in
East and Central China comes, to a great extent, from better transport infrastructure.
It turns out by Granger-test that transport investment especially
that on roads constitutes a source of growth, but not vice versa. We compare
the different effect of railways and roads in different regions, and find out that
public investment on road construction in poor areas is of drastic importance
to growth and poverty alleviation, and therefore should be a priority of policy
choice.