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The Productivity and Supply of Urban Infrastructures

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  • Seitz, Helmut

Abstract

The paper examines the productivity and supply of urban infrastructure capital using a panel data set of 85 West German cities. A simple theoretical framework is used to infer the impact of infrastructure services on private production cost. Assuming local firms to operate under perfect market conditions we derive an optimal local infrastructure supply rule and an optimal business capital tax rate. The empirical part of the paper proceeds by a two step procedure. In a first step we examine the productivity of urban infrastructure service provision by evaluating the cost reductions that are associated with the supply of infrastructures. In a second step, the adjustment of the urban infrastructure capital stock and the urban business tax rate is estimated, incorporating the estimated monetary productivity effects as well as some simple interjurisdictional competition variables into the empirical model.

Suggested Citation

  • Seitz, Helmut, 1995. "The Productivity and Supply of Urban Infrastructures," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 29(2), pages 121-141, May.
  • Handle: RePEc:spr:anresc:v:29:y:1995:i:2:p:121-41
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    References listed on IDEAS

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    1. Gervais, Jean-Philippe & Misawa, Takehiro & McVey, Marty J. & Baumel, C. Phillip, 1999. "Evaluating the Logistic and Economic Impacts of Extending 600-Foot Locks on the Upper Mississippi River: A Linear Programming Approach," Staff General Research Papers Archive 1753, Iowa State University, Department of Economics.
    2. Binkley, James K & Bessler, David A, 1983. "Expectations in Bulk Ocean Shipping: An Application of Autoregressive Modeling," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 516-520, August.
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    Cited by:

    1. Buettner, Thiess, 2001. "Local business taxation and competition for capital: the choice of the tax rate," Regional Science and Urban Economics, Elsevier, vol. 31(2-3), pages 215-245, April.
    2. Carmit Shwartz & W. Erwin Diewert & Kevin J. Fox, 2014. "Consumer Benefits of Infrastructure Services," Discussion Papers 2014-17, School of Economics, The University of New South Wales.
    3. Fumitoshi Mizutani & Tomoyasu Tanaka, 2010. "Productivity effects and determinants of public infrastructure investment," The Annals of Regional Science, Springer;Western Regional Science Association, pages 493-521.
    4. Nijkamp, Peter & Ubbels, Barry, 1999. "Infrastructure, suprastructure and ecostructure : a portfolio of sustainable growth potentials," Serie Research Memoranda 0051, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    5. Gunasekera, Kumudu & Anderson, William & Lakshmanan, T.R., 2008. "Highway-Induced Development: Evidence from Sri Lanka," World Development, Elsevier, vol. 36(11), pages 2371-2389, November.
    6. Barabas, György & Kitlinski, Tobias & Schmidt, Christoph M. & Schmidt, Torsten & Siemers, Lars-H. & Brilon, Werner, 2010. "Verkehrsinfrastrukturinvestitionen: Wachstumsaspekte im Rahmen einer gestaltenden Finanzpolitik. Endbericht - Januar 2010. Forschungsprojekt im Auftrag des Bundesministeriums der Finanzen. Projektnumm," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 72601.
    7. Hirte, Georg & Stephan, Andreas, 2014. "Regionale Beschäftigungswirkungen von öffentlichen Investitionen in Straßen- und Schieneninfrastruktur," Discussion Papers 2/2014, Technische Universität Dresden, "Friedrich List" Faculty of Transport and Traffic Sciences, Institute of Transport and Economics.
    8. Kemmerling, Achim & Stephan, Andreas, 2015. "Comparative political economy of regional transport infrastructure investment in Europe," Journal of Comparative Economics, Elsevier, vol. 43(1), pages 227-239.
    9. Kemmerling, Achim & Stephan, Andreas, 2002. "The Contribution of Local Public Infrastructure to Private Productivity and Its Political Economy: Evidence from a Panel of Large German Cities," Public Choice, Springer, vol. 113(3-4), pages 403-424, December.
    10. Alfredo M. Pereira & Jorge M. Andraz, 2013. "On The Economic Effects Of Public Infrastructure Investment: A Survey Of The International Evidence," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(4), pages 1-37, December.
    11. Fuest Clemens & Riphahn Regina, 2001. "Is the Local Business Tax a User Tax? An Empirical Investigation for Germany / Ist die Gewerbesteuer eine Äquivalenzsteuer? Eine empirische Analyse für Deutschland," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 221(1), pages 14-31, February.
    12. Helmut Seitz, 2000. "Subnational Bailouts in Germany," Research Department Publications 3097, Inter-American Development Bank, Research Department.
    13. Fumitoshi Mizutani & Tomoyasu Tanaka, 2010. "Productivity effects and determinants of public infrastructure investment," The Annals of Regional Science, Springer;Western Regional Science Association, pages 493-521.
    14. Robert Fenge & Matthias Wrede, 2007. "EU Financing and Regional Policy: Vertical Fiscal Externalities when Capital is Mobile," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(4), pages 457-476, December.
    15. Rosina Moreno & Enrique LOpez-bazo & Manuel ArtIs, 2003. "On the effectiveness of private and public capital," Applied Economics, Taylor & Francis Journals, vol. 35(6), pages 727-740.
    16. Stephanie Aubert & Andreas Stephan, 2000. "Regional Infrastructure Policy and its Impact on Productivity: A Comparison of Germany and France," CIG Working Papers FS IV 00-02, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    17. Jiwattanakulpaisarn, Piyapong & Noland, Robert B. & Graham, Daniel J., 2010. "Causal linkages between highways and sector-level employment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(4), pages 265-280, May.
    18. Andreas Stephan, 2001. "Regional Infrastructure Policy and its Impact on Productivity: A Comparison of Germany and France," CIG Working Papers FS IV 01-02, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    19. Andreas Stephan, 2000. "The Contribution of Transport and Human Capital Infrastructure to Local Private Production: A Partial Adjustment Approach," CIG Working Papers FS IV 00-20, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    20. Achim Kemmerling & Andreas Stephan, 2000. "Political Economy of Infrastructure Investment Allocation: Evidence from a Panel of Large German Cities," CIG Working Papers FS IV 00-03, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    21. Rosina Moreno, 1998. "Public infrastructure, private capital and the performance of manufactures: short and long run effects," ERSA conference papers ersa98p165, European Regional Science Association.

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