Effect of Road Infrastructure on Selected Economic Development Indicators in Kenya

Kenya, as a developing nation, has been making significant investments in infrastructure projects, including roads, railways, ports, and energy, in recent years. Such infrastructure development is expected to have far-reaching implications for various sectors of the economy. Efficient and reliable infrastructure networks are crucial for facilitating trade, attracting investments, improving connectivity, reducing transaction costs, and promoting economic activities. However, while there is a general understanding of the importance of infrastructure, it is essential to conduct a focused study to examine the specific effects and outcomes of infrastructure development in Kenya. The study was anchored by Solow neoclassical growth theory. A longitudinal research design was adopted. The study utilized time series secondary data from 1991 to 2021 on an annual basis. The data was obtained from the World Bank and the Kenya National Bureau of Statistics. Empirically, the study developed a transport-growth model that is an extension of Solow (1956) neoclassical growth function and estimate the model with time series data of Kenya. The study adopted Autoregressive Distributed Lag (ARDL) model and Granger causality approach as the technique for testing the study relationships. Diagnostic tests such as normality, Multicollinearity, heteroskedasticity and autocorrelation was conducted to ensure that the assumptions of regression analysis are not violated. Ethical considerations was adhered to by obtaining permit from NACOSTI, Kenyatta university graduate school and the permission from the ethical committee. The short run effect were analysed using ECM informed by the positive cointegration status of the variables all the models. Road infrastructure, labour participation and institution quality index significantly affected economic growth. However, technological growth has insignificant effect on economic growth. It can be concluded that, based on empirical results technological progress has not been fully utilised to generate economic growth. It is also important to point out that the creation of a conducive environment, particularly innovation and technological space enhances economic growth. This can be attained by having a tax haven for the inaugural innovators to sustain their motivation. Strong institutions are defined by adherence to the rule of law and conformity to legislation. There is a need for people in the public sector to embrace the rule of law and existing regulations to reduce theft and corruption.