IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Public Capital and Regional Economic Growth: a SVAR Approach for the Spanish Regions

  • Márquez, Miguel A.

    ()

    (Department of Economics, University of Extremadura, Spain-EU. Regional Economics Applications Laboratory (REAL), University of Illinois at Urbana-Champaign, USA)

  • Ramajo, Julián

    (Department of Economics, University of Extremadura, Spain-EU. Regional Economics Applications Laboratory (REAL), University of Illinois at Urbana-Champaign, USA)

  • Hewings, Geoffrey J. D.

    (Regional Economics Applications Laboratory (REAL), University of Illinois at Urbana-Champaign, USA)

Recently, a significant share of the empirical analysis on the impact of public capital on regional growth has used multivariate time-series frameworks based on vector autoregressive (VAR) models. Nevertheless, not as much attention has been dedicated to the analysis of the long-run determinants of regional growth processes using multi-region panel data and applying panel integration and co-integration techniques. This paper estimates the dynamic domestic effects of public infrastructure using a structural vector autoregressive (S-VAR) methodology for the Spanish regions. From a methodological point of view, the paper contains several features that can be viewed as a contribution to the existing empirical literature. First, the important issues of the stationarity of the data and the existence and estimation of cointegrating relationships in the long-run are addressed in the context of the analysis of panel data. Secondly, the long-run cointegrating production function is embedded within structural vector error correction (S-VEC) shortrun models to produce consistent estimates of impulse responses, contrary to many researchers who have estimated unrestricted VAR models in levels or VAR models in first differences. The estimates reveal new results with respect to the previous empirical evidence.

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.aecr.org/images/ImatgesArticles/2012/3/12_MARQUEZ.pdf
File Function: Full text
Download Restriction: no

Article provided by Asociación Española de Ciencia Regional in its journal Investigaciones Regionales.

Volume (Year): (2011)
Issue (Month): 21 ()
Pages: 199-223

as
in new window

Handle: RePEc:ris:invreg:0038
Contact details of provider: Postal: C/ Viladomat, 321 entresuelo - 08029 Barcelona, Teléfono y Fax: + 34 933101112, E-mail: info@aecr.org, Web: www.aecr.org, Web Investigaciones Regionales: www.investigacionesregionales.org
Phone: +34 93 310 11 12
Fax: +34 93 310 11 12
Web page: http://www.aecr.org/
Email:


More information through EDIRC

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. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  2. Boscá, José Emilio & Escribá, Javier & Murgui, María José, 2000. "The Effect Of Public Infrastructures On The Private Productive Sector Of Spanish Regions," ERSA conference papers ersa00p165, European Regional Science Association.
  3. Pereira, Alfredo Marvao & Roca-Sagales, Oriol, 2003. "Spillover effects of public capital formation: evidence from the Spanish regions," Journal of Urban Economics, Elsevier, vol. 53(2), pages 238-256, March.
  4. Ward Romp & Jakob de Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(s1), pages 6-52, 04.
  5. M. Hashem Pesaran & Til Schuermann & Scott M. Weiner, 2001. "Modelling regional interdependencies using a global error-correcting macroeconometric model," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B4-1, International Conferences on Panel Data.
  6. Pasaran, M.H. & Im, K.S. & Shin, Y., 1995. "Testing for Unit Roots in Heterogeneous Panels," Cambridge Working Papers in Economics 9526, Faculty of Economics, University of Cambridge.
  7. Barro, Robert J. & Sala-i-Martin, Xavier, 1992. "Public Finance in Models of Economic Growth," CEPR Discussion Papers 630, C.E.P.R. Discussion Papers.
  8. Arantza Gorostiaga, 1999. "¿Cómo afecta el capital público y el capital humano al crecimiento?," Investigaciones Economicas, Fundación SEPI, vol. 23(1), pages 95-114, January.
  9. Barro, R.J., 1988. "Government Spending In A Simple Model Of Endogenous Growth," RCER Working Papers 130, University of Rochester - Center for Economic Research (RCER).
  10. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
  11. Pereira, Alfredo M & Sagales, Oriol Roca, 1999. "Public Capital Formation and Regional Development in Spain," Review of Development Economics, Wiley Blackwell, vol. 3(3), pages 281-94, October.
  12. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
  13. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  14. Pesaran, M. Hashem & Shin, Yongcheol & Smith, Richard J., 2000. "Structural analysis of vector error correction models with exogenous I(1) variables," Journal of Econometrics, Elsevier, vol. 97(2), pages 293-343, August.
  15. Roberto Ezcurra & Carlos Gil & Pedro Pascual & Manuel Rapún, 2005. "Public capital, regional productivity and spatial spillovers," The Annals of Regional Science, Springer, vol. 39(3), pages 471-494, 09.
  16. Masao Ogaki & Nelson Mark & Donggyu Sul, 2004. "Dynamic Seemingly Unrelated Cointegrating Regression," Working Papers 04-02, Ohio State University, Department of Economics.
  17. David Alan Aschauer, 1997. "Do States Optimize?: Public Capital and Economic Growth," Economics Working Paper Archive wp_189, Levy Economics Institute.
  18. Matilde Mas & Joaquin Maudos & Francisco Perez & Ezequiel Uriel, 1996. "Infrastructures and Productivity in the Spanish Regions," Regional Studies, Taylor & Francis Journals, vol. 30(7), pages 641-649.
  19. Redding, Stephen J. & Venables, Anthony J, 2000. "Economic Geography and International Inequality," CEPR Discussion Papers 2568, C.E.P.R. Discussion Papers.
  20. Banerjee, Anindya, 1999. " Panel Data Unit Roots and Cointegration: An Overview," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 607-29, Special I.
  21. Dées, Stéphane & di Mauro, Filippo & Pesaran, Hashem & Smith, Vanessa, 2005. "Exploring the international linkages of the euro area: a global VAR analysis," Working Paper Series 0568, European Central Bank.
  22. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  23. Sergio Destefanis & Vania Sena, 2005. "Public capital and total factor productivity: New evidence from the Italian regions, 1970-98," Regional Studies, Taylor & Francis Journals, vol. 39(5), pages 603-617.
  24. 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.
  25. Miguel Márquez & Julián Ramajo & Geoffrey Hewings, 2010. "Measuring the spillover effects of public capital: a bi-regional structural vector autoregressive analysis," Letters in Spatial and Resource Sciences, Springer, vol. 3(3), pages 111-125, October.
  26. Masahisa Fujita & Paul Krugman, 2003. "The new economic geography: Past, present and the future," Economics of Governance, Springer, vol. 83(1), pages 139-164, October.
  27. Lucas, Robert E, Jr, 1993. "Making a Miracle," Econometrica, Econometric Society, vol. 61(2), pages 251-72, March.
  28. Pedroni, Peter, 2004. "Panel Cointegration: Asymptotic And Finite Sample Properties Of Pooled Time Series Tests With An Application To The Ppp Hypothesis," Econometric Theory, Cambridge University Press, vol. 20(03), pages 597-625, June.
  29. David Aschauer, 1988. "Is public expenditure productive?," Staff Memoranda 88-7, Federal Reserve Bank of Chicago.
  30. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
  31. Peter Pedroni, 1999. "Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors," Department of Economics Working Papers 2000-02, Department of Economics, Williams College.
  32. Gonzalez-Paramo, Jose Manuel & Martinez, Diego, 2003. "Convergence across Spanish Regions: New Evidence on the Effects of Public Investment," The Review of Regional Studies, Southern Regional Science Association, vol. 33(2), pages 184-205.
  33. 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.
  34. Kaddour Hadri, 1999. "Testing For Stationarity In Heterogeneous Panel Data," Research Papers 1999_04, University of Liverpool Management School.
  35. Moreno, Rosina & Lopez-Bazo, Enrique & Artis, Manuel, 2002. "Public infrastructure and the performance of manufacturing industries: short- and long-run effects," Regional Science and Urban Economics, Elsevier, vol. 32(1), pages 97-121, January.
  36. Salinas-Jimenez, M. del Mar, 2004. "Public infrastructure and private productivity in the Spanish regions," Journal of Policy Modeling, Elsevier, vol. 26(1), pages 47-64, January.
  37. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  38. Diego Martinez-Lopez, 2006. "Linking Public Investment to Private Investment. The Case of Spanish Regions," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(4), pages 411-423.
  39. 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.
  40. Christophe Kamps, 2005. "The Dynamic Effects of Public Capital: VAR Evidence for 22 OECD Countries," International Tax and Public Finance, Springer, vol. 12(4), pages 533-558, August.
  41. 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.
Full references (including those not matched with items on IDEAS)

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

When requesting a correction, please mention this item's handle: RePEc:ris:invreg:0038. 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: (Julieta Llungo Ortíz)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.