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State Infrastructure and Productive Performance

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  • Morrison, Catherine J
  • Schwartz, Amy Ellen

Abstract

Recent research on productivity growth has focused on public infrastructure and its impact on economic growth and productivity. The authors construct a model of firms' technology and behavior, taking advantage of the analytical framework provided in the cost-function-based applied production-theory literature, and apply it to state-level data for U.S. manufacturing. They find that infrastructure investment provides a significant return to manufacturing firms and augments productivity growth. The net benefits of infrastructure investment may or may not be positive, depending upon the social costs of infrastructure investment and the relative growth rates of output and infrastructure. Copyright 1996 by American Economic Association.

Suggested Citation

  • Morrison, Catherine J & Schwartz, Amy Ellen, 1996. "State Infrastructure and Productive Performance," American Economic Review, American Economic Association, vol. 86(5), pages 1095-1111, December.
  • Handle: RePEc:aea:aecrev:v:86:y:1996:i:5:p:1095-1111
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    References listed on IDEAS

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    1. Morrison, Catherine J, 1988. "Quasi-Fixed Inputs in U.S. and Japanese Manufacturing: A Generalized Leontief Restricted Cost Function Approach," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 275-287, May.
    2. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    3. Ernst R. Berndt & Bengt Hansson, 1991. "Measuring the Contribution of Public Infrastructure Capital in Sweden," NBER Working Papers 3842, National Bureau of Economic Research, Inc.
    4. Nadiri, M Ishaq & Mamuneas, Theofanis P, 1994. "The Effects of Public Infrastructure and R&D Capital on the Cost Structure and Performance of U.S. Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 22-37, February.
    5. Catherine J. Morrison, 1989. "Unraveling the Productivity Growth Slowdown in the U.S., Canada and Japan: The Effects of Subequilibrium, Scale Economies and Markup," NBER Working Papers 2993, National Bureau of Economic Research, Inc.
    6. Randall W. Eberts, 1986. "Estimating the contribution of urban public infrastructure to regional growth," Working Papers (Old Series) 8610, Federal Reserve Bank of Cleveland.
    7. Morrison, Catherine J, 1985. "Primal and Dual Capacity Utilization: An Application to Productivity Measurement in the U.S. Automobile Industry," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(4), pages 312-324, October.
    8. Alicia H. Munnell, 1990. "How does public infrastructure affect regional economic performance?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 34, pages 69-112.
    9. David Alan Aschauer, 1990. "Why is infrastructure important?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 34, pages 21-68.
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