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Effects Of Public Capital On Economic Growth And Productivity In Spain During The Period 1980-2007

Author

Listed:
  • JUSTO DE JORGE MORENO

    (University of Alcala, Spain)

  • CESAR CAMISON ZORZONA

    (University of Valencia, Spain)

  • JUAN MURO ROMERO

    (University of Alcala, Spain)

  • LEOPOLDO LABORDA CASTILLO

    (World Bank, USA)

Abstract

In line with the existing literature, the main aim of this study is to analyse the effects of public capital on growth in the Spanish regions for the period 1980-2007. The methodology used adopts a parametric approach following the recommendations intended to eliminate the effects of demand and estimate only the medium-term impacts, ultimately eliminating any possible inverse causality relationship. The estimates made put the elasticity of the productivity of labour with respect to the delays in investment in infrastructures at 0.183, while elasticity with respect to private investment stands at 0.294. This means it can be concluded that investment in public capital contributes to increasing productivity by approximately 62 per cent in the Spanish regions as a whole. Meanwhile, the analysis of the convergence of the estimated efficiency levels shows that the least efficient regions have benefited from the technology existing in the regions closest to the efficiency frontier. Finally, some reflections are compiled on the role investment in public capital can play in the context of a crisis like the current one, together with other pillars incorporated into the debate, such as fiscal consolidation and structural reforms.

Suggested Citation

  • Justo De Jorge Moreno & Cesar Camison Zorzona & Juan Muro Romero & Leopoldo Laborda Castillo, 2015. "Effects Of Public Capital On Economic Growth And Productivity In Spain During The Period 1980-2007," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 40(4), pages 67-89, December.
    • Handle: RePEc:jed:journl:v:40:y:2015:i:4:p:67-89
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    References listed on IDEAS

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    2. Federico Aresu & Emanuela Marrocu & Raffaele Paci, 2023. "Public capital and institutions' quality in the Italian regions," Journal of Regional Science, Wiley Blackwell, vol. 63(5), pages 1284-1308, November.

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    More about this item

    Keywords

    Public Capital; Efficiency; Convergence; Spanish Regions; Economic Growth;
    All these keywords.

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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