Advanced Search
MyIDEAS: Login

Analysing the impact of public capital stock using the NEG wage equation: a panel data approach

Contents:

Author Info

  • Bernard Fingleton

    ()
    (Department of Economics, University of Strathclyde)

  • Miguel Gómez-Antonio

    ()
    (Universidad Complutense de Madrid)

Abstract

This paper examines the relationship between the level of public infrastructure and the level of productivity using panel data for the Spanish provinces over the period 1984-2004, a period which is particularly relevant due to the substantial changes occurring in the Spanish economy at that time. The underlying model used for the data analysis is based on the wage equation, which is one of a handful of simultaneous equations which when satisfied correspond to the short-run equilibrium of New Economic Geography theory. This is estimated using a spatial panel model with fixed time and province effects, so that unmodelled space and time constant sources of heterogeneity are eliminated. The model assumes that productivity depends on the level of educational attainment and the public capital stock endowment of each province. The results show that although changes in productivity are positively associated with changes in public investment within the same province, there is a negative relationship between productivity changes and changes in public investment in other regions.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. 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.
File URL: http://www.strath.ac.uk/media/departments/economics/researchdiscussionpapers/2009/09-12BF.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Strathclyde Business School, Department of Economics in its series Working Papers with number 0912.

as in new window
Length: 25 pages
Date of creation: May 2009
Date of revision:
Handle: RePEc:str:wpaper:0912

Contact details of provider:
Postal: Sir William Duncan Building, 130 Rottenrow, Glasgow G4 0GE
Phone: +44 (0)141 548 3842
Fax: +44 (0)141 548 4445
Email:
Web page: http://www.strath.ac.uk/economics/
More information through EDIRC

Related research

Keywords: spatial economics; public infrastructure; productivity; panel data; economic geography;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Bernard Fingleton & Miguel Gómez-Antonio, 2011. "Regional productivity variation and the impact of public capital stock: an analysis with spatial interaction, with reference to Spain," Working Papers 1102, University of Strathclyde Business School, Department of Economics.
  2. Evans, Paul & Karras, Georgios, 1994. "Is government capital productive? Evidence from a panel of seven countries," Journal of Macroeconomics, Elsevier, vol. 16(2), pages 271-279.
  3. Redding, Stephen J & Venables, Anthony J., 2000. "Economic Geography and International Inequality," CEPR Discussion Papers 2568, C.E.P.R. Discussion Papers.
  4. MION, Giordano, . "Spatial externalities and empirical analysis: the case of Italy," CORE Discussion Papers RP -1839, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Feenstra & R.C., 1990. "New Goods and Index Members: U.S. Import Prices," Papers 371, California Davis - Institute of Governmental Affairs.
  6. Baier, Scott L. & Bergstrand, Jeffrey H., 2001. "The growth of world trade: tariffs, transport costs, and income similarity," Journal of International Economics, Elsevier, vol. 53(1), pages 1-27, February.
  7. Brian Sloboda & Vincent Yao, 2008. "Interstate spillovers of private capital and public spending," The Annals of Regional Science, Springer, vol. 42(3), pages 505-518, September.
  8. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc.
  9. Otto, Glenn & Voss, Graham M, 1994. "Public Capital and Private Sector Productivity," The Economic Record, The Economic Society of Australia, vol. 70(209), pages 121-32, June.
  10. Ezequiel Uriel Jiménez & Francisco Pérez García & Matilde Mas Ivars & Joaquín Maudos Villarroya, 1995. "Infrastructures And Productivity In The Spanish Regions," Working Papers. Serie EC 1995-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  11. Maria Jesus Delgado & Inmaculada Alvarez, 2007. "Network infrastructure spillover in private productive sectors: evidence from Spanish high capacity roads," Applied Economics, Taylor & Francis Journals, vol. 39(12), pages 1583-1597.
  12. Alicia H. Munnell & Leah M. Cook, 1990. "How does public infrastructure affect regional economic performance?," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 11-33.
  13. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  14. Jeffrey P. Cohen & Catherine J. Morrison Paul, 2004. "Public Infrastructure Investment, Interstate Spatial Spillovers, and Manufacturing Costs," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 551-560, May.
  15. Goerlich Gisbert Francisco J. & Mas Ivars Matilde, 2002. "La evolución económica de las provincias españolas (1955-1998). Volumen II, Desigualdad y convergencia," Books, Fundacion BBVA / BBVA Foundation, edition 2, number 201125.
  16. David Aschauer, 1988. "Is public expenditure productive?," Staff Memoranda 88-7, Federal Reserve Bank of Chicago.
  17. Thierry Mayer & Keith Head, 2003. "The Empirics of Agglomeration and Trade," Working Papers 2003-15, CEPII research center.
  18. Alfredo Pereira & Jorge Andraz, 2006. "Public investment in transportation infrastructures and regional asymmetries in Portugal," The Annals of Regional Science, Springer, vol. 40(4), pages 803-817, December.
  19. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
  20. Chandra, Amitabh & Thompson, Eric, 2000. "Does public infrastructure affect economic activity?: Evidence from the rural interstate highway system," Regional Science and Urban Economics, Elsevier, vol. 30(4), pages 457-490, July.
  21. Robert Ford & Pierre Poret, 1991. "Infrastructure and Private-Sector Productivity," OECD Economics Department Working Papers 91, OECD Publishing.
  22. Garcia-Mila, Teresa & McGuire, Therese J., 1992. "The contribution of publicly provided inputs to states' economies," Regional Science and Urban Economics, Elsevier, vol. 22(2), pages 229-241, June.
  23. Steven Brakman & Harry Garretsen & Marc Schramm, 2005. "Putting New Economic Geography to the Test: Free-ness of Trade and Agglomeration in the EU Regions," CESifo Working Paper Series 1566, CESifo Group Munich.
  24. Alfredo Marvao Pereira & Oriol Roca Sagalés, 2002. "Spillover effects of public capital formation : evidence from the spanish regions," Working Papers wpdea0210, Department of Applied Economics at Universitat Autonoma of Barcelona.
  25. Cantos, Pedro & Gumbau-Albert, Mercedes & Maudos, Joaquin, 2005. "Transport infrastructures and regional growth: evidence of the Spanish case," MPRA Paper 15261, University Library of Munich, Germany.
  26. McMillin, W Douglas & Smyth, David J, 1994. "A Multivariate Time Series Analysis of the United States Aggregate Production Function," Empirical Economics, Springer, vol. 19(4), pages 659-73.
  27. Bronzini, Raffaello & Piselli, Paolo, 2009. "Determinants of long-run regional productivity with geographical spillovers: The role of R&D, human capital and public infrastructure," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 187-199, March.
  28. Pedro Cantos & Mercedes Gumbau‐Albert & Joaqu�N Maudos, 2003. "Transport infrastructures, spillover effects and regional growth: evidence of the Spanish case," Transport Reviews, Taylor & Francis Journals, vol. 25(1), pages 25-50, December.
  29. Giordano Mion, 2004. "Spatial externalities and empirical analysis: the case of Italy," LSE Research Online Documents on Economics 42663, London School of Economics and Political Science, LSE Library.
  30. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
  31. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
  32. Pinnoi, Nat, 1994. "Public infrastructure and private production measuring relative contributions," Journal of Economic Behavior & Organization, Elsevier, vol. 23(2), pages 127-148, March.
  33. Harrigan, James, 1995. "The Volume of Trade in Differentiated Intermediate Goods: Theory and Evidence," The Review of Economics and Statistics, MIT Press, vol. 77(2), pages 283-93, May.
  34. Head, Charles Keith & Mayer, Thierry, 2005. "Regional Wage and Employment Responses to Market Potential in the EU," CEPR Discussion Papers 4908, C.E.P.R. Discussion Papers.
  35. Baltagi, Badi H & Pinnoi, Nat, 1995. "Public Capital Stock and State Productivity Growth: Further Evidence from an Error Components Model," Empirical Economics, Springer, vol. 20(2), pages 351-59.
  36. Pierre-Philippe Combes & Miren Lafourcade, 2005. "Transport costs: measures, determinants, and regional policy implications for France," Journal of Economic Geography, Oxford University Press, vol. 5(3), pages 319-349, June.
  37. Bajo-Rubio, Oscar & Sosvilla-Rivero, Simon, 1993. "Does public capital affect private sector performance? : An analysis of the Spanish case, 1964-1988," Economic Modelling, Elsevier, vol. 10(3), pages 179-185, July.
  38. Douglas Holtz-Eakin & Amy Ellen Schwartz, 1995. "Spatial Productivity Spillovers from Public Infrastructure: Evidence from State Highways," NBER Working Papers 5004, National Bureau of Economic Research, Inc.
  39. Douglas Holtz-Eakin, 1992. "Public-Sector Capital and the Productivity Puzzle," NBER Working Papers 4122, National Bureau of Economic Research, Inc.
  40. Voss, Graham M., 2002. "Public and private investment in the United States and Canada," Economic Modelling, Elsevier, vol. 19(4), pages 641-664, August.
  41. John A. Tatom, 1991. "Public capital and private sector performance," Review, Federal Reserve Bank of St. Louis, issue May, pages 3-15.
  42. Douglas Holtz-Eakin & Amy Schwartz, 1995. "Spatial productivity spillovers from public infrastructure: Evidence from state highways," International Tax and Public Finance, Springer, vol. 2(3), pages 459-468, October.
  43. Ezequiel Uriel Jiménez & Francisco Pérez García & Matilde Mas Ivars & Joaquín Maudos Villarroya, 1993. "Capital Público Y Productividad De La Economía Espanola," Working Papers. Serie EC 1993-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  44. Otto, Glenn & Voss, Graham, 1996. "Public Capital and Private Production in Australia," MPRA Paper 52110, University Library of Munich, Germany.
  45. Martin, Philippe, 1998. "Public Policies, Regional Inequalities and Growth," CEPR Discussion Papers 1841, C.E.P.R. Discussion Papers.
  46. Ratner, Jonathan B., 1983. "Government capital and the production function for U.S. private output," Economics Letters, Elsevier, vol. 13(2-3), pages 213-217.
  47. Keith Head & John Ries, 2001. "Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of U.S.-Canada Trade," American Economic Review, American Economic Association, vol. 91(4), pages 858-876, September.
  48. Rosina Moreno & Enrique López-Bazo, 2007. "Returns to Local and Transport Infrastructure under Regional Spillovers," International Regional Science Review, , vol. 30(1), pages 47-71, January.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Gómez-Antonio, Miguel & Fingleton, Bernard, 2011. "Regional productivity variation and the impact of public capital stock: an analysis with spatial interaction, with reference to Spain," SIRE Discussion Papers 2011-05, Scottish Institute for Research in Economics (SIRE).
  2. Rhydian James & Peter Midmore & Dennis Thomas, 2012. "Public Sector Size and Peripherality," Spatial Economic Analysis, Taylor & Francis Journals, vol. 7(4), pages 447-460, December.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:str:wpaper:0912. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kirsty Hall).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.