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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. Euijune Kim & Geoffrey Hewings & Chowoon Hong, 2004. "An Application of an Integrated Transport Network- Multiregional CGE Model: a Framework for the Economic Analysis of Highway Projects," Economic Systems Research, Taylor & Francis Journals, vol. 16(3), pages 235-258.
    5. 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.
    6. 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 / Review of Public Economics, IEF, vol. 165(2), pages 25-51, June.
    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. José Manuel González-Páramo & Diego Martínez López, "undated". "Public Investment and Convergence in the Spanish Regions," Studies on the Spanish Economy 112, FEDEA.
    9. 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..
    10. Botero García, Jesús Alonso & Franco Gonzalez, Humberto & Hurtado Rendon, Alvaro & Arellano Morales, Matheo & MontañEz Herrera, Diego Fernando, 2020. "Fiscal sustainability, public expense and economic growth," Conference papers 333218, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

    More about this item

    Keywords

    Duality theory; public infrastructures; translog cost function; input demands;
    All these keywords.

    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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