Date of this Version

2-9-2017

Document Type

Journal Article

Publication Details

Published version

Regan, M. (2017). Capital markets, infrastructure investment and growth in the Asia Pacific region. International Journal of Financial Studies, 1-28.

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© 2017 by the author

Distribution License

Creative Commons Attribution 4.0 License
This work is licensed under a Creative Commons Attribution 4.0 License.

ISBN

2227-7072

Abstract

This paper examines the relationship between infrastructure investment activity, capital market development, the role of public institutions and economic development in the Asia Pacific. It adopts a review approach drawing on empirical evidence over recent decades. Infrastructure is shown to be an important asset class playing a central role in a nation’s output, growth, productivity and microeconomic performance. Infrastructure investment also requires investment and predictions of a widening gap in the future supply of infrastructure in the Asia Pacific will require new forms of capital from both traditional and new sources including wider use of private participation, institutional investment, asset recycling and revenue bonds. Capital market development is also necessary to raise long-term local currency finance and evidence suggests that progress with regional capital market integration is slow and a continuing reform agenda is required. The dividend for regional countries is the prospect of higher levels of economic growth with infrastructure investment, capital market development, and foreign direct investment shown to have a strong and positive association with growth. A crucial link in this association identified in the review is the part played by national and regional institutions in improving the efficiency with which infrastructure is managed and providing promising ground for further research where the importance of these links can be researched in greater depth.

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