It has been frequently quoted in the literature that one decisive cause of the productive performance of an economy might be infrastructure investment. This paper provides a dual profit theoretical framework of measuring the effects of infrastructure on economic performance in terms of gains in profits, cost savings, as well as in terms of productivity growth enhancement. In an empirical application, we opt for Mexican industry data. The results show that returns to infrastructure capital are significant and positive, though some variability across time exists. Moreover, the decomposition of total factor productivity growth reveals that the economic performance could be enhanced by investing in infrastructure capital.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number
CESifo Working Paper No. 2099.
Find related papers by JEL classification: D21 - Microeconomics - - Production and Organizations - - - Firm Behavior D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures