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Road investment and regional productivity growth: the effects of vehicle intensity and congestion

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  • Daniel Montolio
  • Albert Solé‐Ollé

Abstract

This article presents a series of novelties with respect to previous studies of the effect of productive infrastructures on output growth. We study public investment in road infrastructures as a determinant of the total factor productivity (TFP) growth for Spanish provinces (NUTS 3) for the period 1984–1994. We allow the effect of road infrastructures to depend on the extent of the road use by provincial industries, proxied by these industries’ vehicle intensity. Moreover, we consider the services provided by the stock of road infrastructures as an impure public good, that is, one that is subject to congestion. Finally, using the instrumental variables technique, we account for possible problems of endogeneity in the regressions. Resumen Este artículo presenta una serie de novedades con respecto a estudios previos del efecto de infraestructuras productivas en el crecimiento de la producción. Estudiamos la inversión pública en infraestructura de carreteras como un determinante del crecimiento de la productividad factorial total (TFP) para provincias españolas (NUTS 3) durante el período 1984–1994. Permitimos que el efecto de infraestructura de carreteras dependa de la escala de utilización de las carreteras por industrias provinciales, representada mediante la intensidad de vehículos de estas industrias. Además, consideramos los servicios aportados por el conjunto de infraestructura de carreteras como un bien público impuro, es decir, uno sujeto a congestión. Finalmente, utilizando la técnica de variables instrumentales, tenemos en cuenta los posibles problemas de endogeneidad en las regresiones.

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  • Daniel Montolio & Albert Solé‐Ollé, 2009. "Road investment and regional productivity growth: the effects of vehicle intensity and congestion," Papers in Regional Science, Wiley Blackwell, vol. 88(1), pages 99-118, March.
    • Handle: RePEc:bla:presci:v:88:y:2009:i:1:p:99-118
    DOI: 10.1111/j.1435-5957.2008.00167.x
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