In this paper we examine the effects of the services provided by public infrastructure on the cost structure, private input demands, and productivity performance of twenty two-digit Greek manufacturing industries. The model of the paper is the dual cost function. Although the effects of public infrastructure varies across different industries our results provide evidence in favour of a productive public infrastructure. In addition, public infrastructure is found to be complement to private capital stock and substitute to labour. Specifically, the cost-saving impact of public infrastructure ranges from 0.02 percent in food manufacturing industry to 0.78 percent in wood and cork. Moreover, empirical evidence is provided in favour of the argument that the productivity growth of the majority of the twenty Greek manufacturing industries has been depressed by the observed shortage in public infrastructure in the eighties.
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Paper provided by Queen Mary, University of London, Department of Economics in its series Working Papers with number
406.
Find related papers by JEL classification: 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 L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
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