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Public Sector Capital and the Production Efficiency of U.S. Regional Manufacturing Industries

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  • Sangho Kim
  • Young Hoon Lee

Abstract

This paper applies a stochastic frontier production model with time‐varying technical efficiency to investigate the relationship between public capital and technical efficiency. It is based on the proposition that public capital has an effect on actual output by enhancing technical efficiency, thereby reducing the gap between maximum potential output and actual output. Empirical results using panel data from U.S. state manufacturing industries during 1969–86 show that technical efficiencies varied substantially, both between states and between years; variations in technical efficiency are significantly explained by variations in public‐sector capital. JEL Classification Numbers: O20, H54, C23.

Suggested Citation

  • Sangho Kim & Young Hoon Lee, 2002. "Public Sector Capital and the Production Efficiency of U.S. Regional Manufacturing Industries," The Japanese Economic Review, Japanese Economic Association, vol. 53(4), pages 466-477, December.
    • Handle: RePEc:bla:jecrev:v:53:y:2002:i:4:p:466-477
    DOI: 10.1111/1468-5876.00020
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    Citations

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    Cited by:

    1. Akihiro Otsuka, 2017. "Regional determinants of total factor productivity in Japan: stochastic frontier analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(3), pages 579-596, May.
    2. Metin KARADAG, 2010. "The Impact of Public Capital on the Efficiency of Private Manufacturing Industry at the Regional Level," Ege Academic Review, Ege University Faculty of Economics and Administrative Sciences, vol. 10(4), pages 1167-1174.
    3. Tingting Tong & T. Edward Yu & Kimberly Jensen & Daniel De La Torre Ugarte & Seong‐Hoon Cho, 2016. "Impact of Public Infrastructure on Output of U.S. Food Manufacturing Industries: A Heterogeneous Dynamic Panel Approach," Agribusiness, John Wiley & Sons, Ltd., vol. 32(4), pages 439-453, November.
    4. Claudia Werker, 2006. "An Assessment of the Regional Innovation Policy by the European Union based on Bibliometrical Analysis," Papers on Economics and Evolution 2006-11, Philipps University Marburg, Department of Geography.
    5. Joseph Berechman & Dilruba Ozmen & Kaan Ozbay, 2006. "Empirical analysis of transportation investment and economic development at state, county and municipality levels," Transportation, Springer, vol. 33(6), pages 537-551, November.

    More about this item

    JEL classification:

    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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