The Impact of Public Infrastructure on the Productivity of the Chilean Economy
The aim of this study is to assess the effect of the change in infrastructure capital on the cost structure of the Chilean economy, and thereby on productivity, differentiating between two key institutional periods. A further aim is to establish the extent to which infrastructure capital formation affects private capital. The authors use an econometric estimation of the cost elasticity of infrastructure. Conclusions indicate that an increased infrastructure capital reduces the production cost of the economy, thereby increasing productivity, mostly in the second period. In turn, especially in this latter period, infrastructure capital formation appears to assert both a positive cost-share effect on private capital and a negative cost-share effect on labor. These effects can be explained to a large extent by the significant differences between the institutional structures of the two consecutive periods studied. Copyright Blackwell Publishing Ltd 2004..
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Volume (Year): 8 (2004)
Issue (Month): 2 (05)
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References listed on IDEAS
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- Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-1196, September.
- Feltenstein, Andrew & Ha, Jiming, 1995. "The Role of Infrastructure in Mexican Economic Reform," World Bank Economic Review, World Bank Group, vol. 9(2), pages 287-304, May.
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- E. C. Mamatzakis, 1999. "Testing for long run relationship between infrastructure and private capital productivity: a time series analysis for the Greek industry," Applied Economics Letters, Taylor & Francis Journals, vol. 6(4), pages 243-246.