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Productivity Effects Of Public Capital Maintenance: Evidence From U.S. States

Author

Listed:
  • Sarantis Kalyvitis
  • Eugenia Vella

Abstract

This article assesses the productivity effects of infrastructure operation and maintenance (O&M) spending by state and local governments in the 48 contiguous U.S. states over the period 1978–2000. We explicitly account for transboundary spillovers of capital and O&M spending and follow a semiparametric methodology that allows us to estimate state‐specific output elasticities. We find strong evidence that in all 48 states the cross‐state spillover effects of O&M outlays on productivity exceed their within‐state impacts and are substantially higher than the spillover effects of capital expenditure. (JEL C14, E22, E62, H76, O11, O47, R11)

Suggested Citation

  • Sarantis Kalyvitis & Eugenia Vella, 2015. "Productivity Effects Of Public Capital Maintenance: Evidence From U.S. States," Economic Inquiry, Western Economic Association International, vol. 53(1), pages 72-90, January.
    • Handle: RePEc:bla:ecinqu:v:53:y:2015:i:1:p:72-90
    DOI: 10.1111/ecin.12136
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    Cited by:

    1. Vetlov, Igor & Ferdinandusse, Marien & de Jong, Jasper & Funda, Josip, 2017. "The effect of public investment in Europe: a model-based assessment," Working Paper Series 2021, European Central Bank.
    2. Makuyana Garikai & Odhiambo Nicholas M., 2018. "Public and Private Investment and Economic Growth: An Empirical Investigation," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 63(2), pages 87-106, August.
    3. Nikos Benos & Nikolaos Mylonidis & Stefania Zotou, 2017. "Estimating production functions for the US states: the role of public and human capital," Empirical Economics, Springer, vol. 52(2), pages 691-721, March.
    4. Makram El‐Shagi & Steven Yamarik, 2019. "State‐level capital and investment: Refinements and update," Growth and Change, Wiley Blackwell, vol. 50(4), pages 1411-1422, December.

    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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