The research investigates the impact of transport infrastructure investment (TII) on economic growth. We applied non-linear neoclassical specification to our unbalanced panel data that covers 27 EU countries (Cyprus is ex-cluded due to missing data and the United Kingdom is a part of the sample) for the period of 2000–2019. Our model includes a multiplicative term to evaluate if the government quality mediates the effect of TII on growth. Our research reveals the positive and statistically significant relationship between TII and economic growth but with a diminishing return. Estimation of the government quality as a possible moderator of the effect that TII has on growth shows that control of corruption plays a significant role in the TII-growth nexus. We find that in countries with a low level of con-trol of corruption, TII has a statistically significant negative effect on growth.

DOI: https://doi.org/10.3846/bm.2022.705