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On The Economic Effects Of Investment In Railroad Infrastructures In Portugal

Author

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  • Alfredo Marvão Pereira

    () (Department of Economics, The College of William and Mary)

  • Jorge M. Andraz

    () (Faculdade de Economia, Universidade do Algarve)

Abstract

The objective of this paper is to identify the effects of railroad infrastructure investment on aggregate and regional economic performance in Portugal. At the aggregate level, we show that railroad investment crowds in private investment and employment and have strong effects on output. At the regional level, we show that railroad investment affects private investment positively in all regions, employment in only Lisbon and the North, and output in all regions with the exception of Alentejo. The effects are regionally distributed in a rather uneven manner with Lisbon and the North capturing the bulk of the effects. Our results also highlight the relevance of regional spillovers. In terms of the relative effects of comparable railroad investment in the region and elsewhere in the country, we find that the North and the Center benefit more from investment elsewhere while the remaining regions benefit more from local investment. Finally, from a country-wide perspective, railroad investment located in Lisbon generates the largest marginal benefits, which reflect, mostly, the large effects in the Lisbon region itself. By contrast, railroad investment in the remaining regions has a much lower marginal benefit to the country, but these benefits reflect mostly spillovers. This highlights the difficulty in implementing policies that simultaneously maximize aggregate growth and reduce regional disparities.

Suggested Citation

  • Alfredo Marvão Pereira & Jorge M. Andraz, 2010. "On The Economic Effects Of Investment In Railroad Infrastructures In Portugal," Working Papers 96, Department of Economics, College of William and Mary, revised 03 Apr 2012.
  • Handle: RePEc:cwm:wpaper:96
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    File URL: http://economics.wm.edu/wp/cwm_wp96rev1.pdf
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    References listed on IDEAS

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    1. Alfredo M. Pereira & Jorge M. Andraz, 2012. "On The Economic Effects Of Investment In Railroad Infrastructures In Portugal," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 37(2), pages 79-107, June.

    More about this item

    Keywords

    railroad infrastructure; public investment; regional spillovers;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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