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The effects of public infrastructure on the cost structure of Spanish industries

Author

Listed:
  • C. Alicia Avilés Zugasti

    () (Dpto. Teoría e Historia Económica, Facultad de Ciencias Económicas y Empresariales, Universidad de Málaga, 29013 Málaga, Spain Dpto. Economía Aplicada , Universidad de Málaga, 29013 Málaga, Spain)

  • Rosario Gómez García

    () (Dpto. Teoría e Historia Económica, Facultad de Ciencias Económicas y Empresariales, Universidad de Málaga, 29013 Málaga, Spain Dpto. Economía Aplicada , Universidad de Málaga, 29013 Málaga, Spain)

  • José Sánchez Maldonado

    () (Dpto. Teoría e Historia Económica, Facultad de Ciencias Económicas y Empresariales, Universidad de Málaga, 29013 Málaga, Spain Dpto. Economía Aplicada , Universidad de Málaga, 29013 Málaga, Spain)

Abstract

This paper examines the impact of public infrastructures on the performance of Spanish private business at a disaggregated industry level. We use duality theory to recover the productivity effects of public capital by calculating the cost saving effects that are associated to public services. Using a translog cost function we present panel estimates for 14 Spanish industries during the period 1980-1991. Our results strongly suggest that public capital formation can be considered to be an instrument to improve competitiveness by reducing production costs. However, the results also indicate that there is a technologically induced labor saving effect through higher public investment. Furthermore, our estimates suggest that a distinction among industries is of importance because the effects of public infrastructures vary across industries considerably.

Suggested Citation

  • C. Alicia Avilés Zugasti & Rosario Gómez García & José Sánchez Maldonado, 2001. "The effects of public infrastructure on the cost structure of Spanish industries," Spanish Economic Review, Springer;Spanish Economic Association, vol. 3(2), pages 131-150.
  • Handle: RePEc:spr:specre:v:3:y:2001:i:2:p:131-150
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    Citations

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    Cited by:

    1. Sallahuddin Hassan & Zalila Othman & Mohd Zaini Abd Karim, 2011. "Private and Public Investment in Malaysia: A Panel Time-Series Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 1(4), pages 199-210.
    2. Ertugrul Deliktas & A. Önder & Metin Karadag, 2009. "The spillover effects of public capital on the Turkish private manufacturing industries in the geographical regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(2), pages 365-378, June.
    3. Roibás, David & Baños, José, 2010. "The Impact of Infraestructures in Provincial Production: Assesing its Dynamic Impact," Efficiency Series Papers 2010/05, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    4. C. Alicia Avilés Zugasti & Rosario Gómez García & José Sánchez Maldonado, 2003. "Capital público, actividad económica privada y efectos desbordamiento: Un análisis por Comunidades Autónomas de los sectores Industria y Construcción en España," Hacienda Pública Española, IEF, vol. 165(2), pages 25-51, June.
    5. JosÈ Manuel Gonz·lez-P·ramo & Diego MartÌnez LÛpez, "undated". "Public Investment and Convergence in the Spanish Regions," Studies on the Spanish Economy 112, FEDEA.
    6. Carmen Díaz Roldán & Diego Martínez-López, 2005. "Inversión pública y crecimiento económico. Una revisión crítica con propuesta de futuro," Economic Working Papers at Centro de Estudios Andaluces E2005/10, Centro de Estudios Andaluces.
    7. Simón Sosvilla-Rivero, "undated". "Structural Funds and Spain’s Objective 1 Regions: An Analysis Based on the Hermin Model," Working Papers 2005-24, FEDEA.
    8. Betty Agnani & Henry Aray, "undated". "Testing for Political Effects on Total Factor Productivity," ThE Papers 09/13, Department of Economic Theory and Economic History of the University of Granada..

    More about this item

    Keywords

    Duality theory; public infrastructures; translog cost function; input demands;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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