Linking public investment to private investment
AbstractLiterature describes a positive effect of public investment on private capital accumulation. This paper seeks to provide new empirical evidence on this latter relationship for the case of Spanish regions over period 1965-1997. We use a crowding-out theoretical framework and panel data methodology. The results show a positive effect of productive and social public investment (especially in education) on private investment. The spillover effects generated by productive infrastructures located in other regions do not seem to encourage private investment in neighbouring regions. Public consumption and interest rate exert a negative influence on private capital accumulation. These results are robust to changes in the econometric specification.
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Bibliographic InfoPaper provided by Centro de Estudios Andaluces in its series Economic Working Papers at Centro de Estudios Andaluces with number E2001/04Revision.
Length: 25 pages
Date of creation: 2005
Date of revision:
Crowding-out; regional economics; investment; panel data.;
Find related papers by JEL classification:
- R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-04-09 (All new papers)
- NEP-GEO-2005-04-09 (Economic Geography)
- NEP-MAC-2005-04-09 (Macroeconomics)
- NEP-PBE-2005-04-09 (Public Economics)
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