Daniele Girardi
PhD student, DEPS, University of Siena
Antonio Mura
CRESME Ricerche, Roma
Abstract
This article provides evidence of an inverted U-shaped relationship between the share of construction in GDP and economic development, employing panel data for world countries for the period 2000-2011. The relationship holds only after logarithmic transformation of the data, implying that the curve is asymmetric with respect to its maximum. This means that the relative level of construction activity tends to increase in developing countries, to peak during industrialization and to decrease at a slowing pace in industrialized countries, approaching stabilization in mature economies. The fitness of the model increases significantly if we measure economic development by means of alternative indicators instead of per-capita GDP. The curve is robust to the inclusion of control variables and there is evidence of a linear relation between income distribution and construction activity level
Keywords
Construction, Development, Investment, Measures of Development
JEL Classification
L74, 010, N60
