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Diagnosing the Productivity Effect of Public Capital in the Private Sector

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  • Chu-Ping C. Vijverberg

    (Wichita State University)

  • Wim P. M. Vijverberg

    ()
    (University of Texas at Dallas)

Abstract

Does public capital contribute to the productivity in the private sector? If so, which part of the private sector benefits most? Is public capital a substitute for or a complement of labor and private capital? This paper addresses these questions with both cost and profit function models estimated on U.S. time series data of the private sector and two of its subsectors. It pays special attention to nonstationarity in the data, to endogeneity in the price variables, and to the statistical and economic significance of the public capital effect.

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File URL: http://college.holycross.edu/RePEc/eej/Archive/Volume33/V33N2P207_230.pdf
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Bibliographic Info

Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

Volume (Year): 33 (2007)
Issue (Month): 2 (Spring)
Pages: 207-230

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Handle: RePEc:eej:eeconj:v:33:y:2007:i:2:p:207-230

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  1. Barro, R.J., 1988. "Government Spending In A Simple Model Of Endogenous Growth," RCER Working Papers 130, University of Rochester - Center for Economic Research (RCER).
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  16. Nigel Spence & Antonis Rovolis, 2002. "Duality theory and cost function analysis in a regional context: the impact of public infrastructure capital in the Greek regions," The Annals of Regional Science, Springer, vol. 36(1), pages 55-78.
  17. Shunji Oniki, 2000. "Testing the Induced Innovation Hypothesis in a Cointegrating Regression Model," The Japanese Economic Review, Japanese Economic Association, vol. 51(4), pages 544-554, December.
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Cited by:
  1. Wim Vijverberg & Feng-Cheng Fu & Chu-Ping Vijverberg, 2011. "Public infrastructure as a determinant of productive performance in China," Journal of Productivity Analysis, Springer, vol. 36(1), pages 91-111, August.
  2. Fu, Feng-Cheng & Vijverberg, Chu-Ping C. & Vijverberg, Wim P., 2004. "Public Infrastructure as a Determinant of Intertemporal and Interregional Productive Performance in China," IZA Discussion Papers 1019, Institute for the Study of Labor (IZA).

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