Page 56 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.80, # 1, 2023, pp. 54-66

Finally, the study will draw policy implications from the empirical findings and
provide recommendations for policymakers on how to improve transportation
infrastructure to stimulate economic growth in Azerbaijan.

Limitation of ARDl bounds testing approach
One limitation of the ARDL Bounds Testing approach is that it requires the
assumption of a linear relationship between the variables, which may not always hold
in practice, and non-linear relationships may not be captured by this approach.
Another limitation is that the ARDL model assumes that the error term is stationary,
which may not always be the case in real-world situations. Furthermore, the ARDL
model requires that the time series used in the analysis are stationary, which may
require complex transformations of the data, and this may result in loss of information
or statistical power. Finally, the ARDL model is subject to model selection biases, and
it is essential to test the robustness of the results to alternative model specifications
and sample periods.

LITERATURE REVIEW
The effects of transport infrastructure on economic growth have been investigated by
many researchers. As a result of these studies, researchers have come to different
conclusions. Transportation infrastructure has long been considered an important
factor in economic growth, and many studies have examined the relationship between
the two. Johansson (2006) conducted a robustness analysis and found that the positive
relationship between infrastructure investment and economic growth was not sensitive
to alternative specifications of the econometric model.

Canning and Pedroni (2008) also found a strong relationship between infrastructure
investment and long-run economic growth in a panel of 85 countries. In terms of specific
modes of transportation, high-speed rail has been a popular topic of study. De Rus and
Nombela (2007) investigated the social profitability of high-speed rail investment and
found that it was not always positive, emphasizing the importance of careful cost-benefit
analysis. Guo, Liu, and Xu (2019) examined the economic effects of transportation
infrastructure investment in China, focusing on highways and railways, and found that
investment in both types of infrastructure had a positive impact on economic growth. The
impact of transportation infrastructure on tourism has also been studied. Chandra and
Kumar (2014) found that transportation plays a critical role in the growth of tourism and
that the environmental impact of transportation must be taken into consideration. Lee, Lee,
and Choi (2019) conducted a meta-analysis of the economic impact of infrastructure and
found that infrastructure investment has a positive effect on economic growth, but that the
magnitude of the effect varies depending on the type of infrastructure, the level of
development of the country, and other factors.

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