Impacts of road transport infrastructure investments on the Latin American Integration Route

Abstract

Using structural impact analysis, this paper investigates the economic implications of road transport infrastructure investments on the Latin American Integration Route (LAIR) in the state of Mato Grosso do Sul (MS), Brazil. We aim to determine whether these investments can drive short-term local economic growth, identify sectors that benefit the most from the investments, and analyze the distribution of effects among MS municipalities. Based on three comparative scenario simulations, the findings indicate that infrastructure investments are likely to yield positive short-term impacts on MS's GDP. The intensity of these impacts varies across industries and municipalities, with Campo Grande (state capital) being a key beneficiary. Compared to other types of investments, those in transport infrastructure have a lower dispersion capacity in space. The main contribution lies in utilizing the S-curve to model the financial progress of each investment project, as this information is frequently unavailable. Additionally, adopting the Spatial Location Quotient (SLQ) estimates the spatial distribution of investments impacts. Lastly, the guided simulation of investments is a methodology to enhance the efficacy of formulating and executing public investment policies, considering the local spatial consequences of these investments.