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Electricity, Highways and Manufacturing Growth: A Cost Based Estimate

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  • Alejandro Castañeda Sabido

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    (Centro de Estudios Económicos, El Colegio de México, A.C.)

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    Abstract

    This paper studies the rqle of electricity and highways on the Mexican manufacturing sector. The paper uses a weighted aggregate in put of labor and capital (with weights equal to their share in costs) and a weighted measure of infrastructure to estimate jointly the elasticity of infrastructure and the degree of internal returns to scale. 1 pool two digit industries to obtain the estimates for the whole manufacturing sec tor. This paper follows the first order tradition initiated by Solow (1957) and Hall (1988a, b). For the entire manufacturing sector, 1 find that a weighted average index of both types of infrastructure has a significant effect on manufacturing growth. At the sectoral level the evidence is mixed.

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    File URL: http://www.economiamexicana.cide.edu/num_anteriores/XI-1/03_ALEJANDRO_CASTANEDA.pdf
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    Bibliographic Info

    Article provided by in its journal Economia Mexicana NUEVA EPOCA.

    Volume (Year): XI (2002)
    Issue (Month): 1 (January-June)
    Pages: 59-77

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    Handle: RePEc:emc:ecomex:v:11:y:2002:i:1:p:59-77

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    Keywords: infrastructure; returns to scale; external effects;

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    1. Robert J. Barro, 1988. "Government Spending in a Simple Model of Endogenous Growth," NBER Working Papers 2588, National Bureau of Economic Research, Inc.
    2. David Aschauer, 1988. "Is public expenditure productive?," Staff Memoranda, Federal Reserve Bank of Chicago 88-7, Federal Reserve Bank of Chicago.
    3. Feltenstein, Andrew & Ha, Jiming, 1995. "The Role of Infrastructure in Mexican Economic Reform," World Bank Economic Review, World Bank Group, World Bank Group, vol. 9(2), pages 287-304, May.
    4. Alejandro Castañeda Sabido, 1998. "Measuring the degree of collusive conduct in the Mexican manufacturing sector," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 13(2), pages 157-169.
    5. Susanto Basu & John Fernald, 2000. "Why Is Productivity Procyclical? Why Do We Care?," NBER Working Papers 7940, National Bureau of Economic Research, Inc.
    6. John Shea, 1997. "Instrument Relevance in Multivariate Linear Models: A Simple Measure," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 79(2), pages 348-352, May.
    7. Alejandro Castañeda & Pablo Cotler & Octavio Gutiérrez, 2000. "The Impact of Infrastructure on Mexican Manufacturing Growth," Economia Mexicana NUEVA EPOCA, , , vol. 0(2), pages 143-164, July-Dece.
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