Economic impacts of the construction of the first state railway in Mato Grosso: An Input-Output analysis

Abstract

This paper employs the Input-Output methodology to evaluate the economic impacts of the construction of the first state railway in Mato Grosso, focusing on its implementation phase. The analysis estimates the effects of a demand shock, resulting from an investment of R$ 8.12 billion, on key variables such as Gross Production Value (GPV), Gross Value Added (GVA), employment, and wages. The results indicate a significant increase of 6.37% in GPV, 6.97% in GVA, 8.10% in employment, and 6.50% in wages. The Input-Output methodology demonstrated that the construction sector was the primary beneficiary, absorbing 76.47% of the resources, followed by the commerce and services sectors. In addition to direct effects, significant indirect and induced impacts were identified, highlighting the strategic importance of the railway for the state’s logistical infrastructure, particularly in facilitating the export of agricultural commodities. This study provides valuable insights for public policy aimed at fostering regional socioeconomic development through investments in railway transportation.