IDEAS home Printed from
   My bibliography  Save this article

Dynamics of Public Infrastructure, Industrial Productivity and Profitability


  • Shah, Anwar


A restricted equilibrium framework is utilized to estimate the contribution of public investment in infrastructure to private sector profitability. A restricted cost function in translog form which treats labor and materials as variable inputs and private capital and public sector capital stock in transportation, communications and electricity as quasi-fixed inputs is specified. A system of non-linear equations comprising variable cost function and derived input demand equations is estimated using data from 1970 to 1987 for twenty-six Mexican three-digit manufacturing industries. The divergence of private and public capital stocks from their static equilibrium levels is estimated. The net rate of return to fixed factors is also calculated. Estimates of allocative efficiency are derived. The study further provides estimates of short-run and long-run scale economies, output elasticity of factors, measures of productivity growth and technical change. Economic significance and policy implications of the findings are also presented. Copyright 1992 by MIT Press.

Suggested Citation

  • Shah, Anwar, 1992. "Dynamics of Public Infrastructure, Industrial Productivity and Profitability," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 28-36, February.
  • Handle: RePEc:tpr:restat:v:74:y:1992:i:1:p:28-36

    Download full text from publisher

    File URL:
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See for details.

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:74:y:1992:i:1:p:28-36. 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: (Ann Olson). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.