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Infrastructure Investment in Portugal and the Traded/Non-Traded Industry Mix

Author

Listed:
  • Alfredo Marvão Pereira

    (Department of Economics, The College of William and Mary, Williamsburg VA 23187)

  • Rui Manuel Pereira

    (Department of Economics, The College of William and Mary, Williamsburg VA 23187)

Abstract

Using a newly-developed data set for Portugal, we analyze the industry-level effects of infrastructure investment. Focusing on the divide between traded and non-traded industries, we find that infrastructure investments have a non-traded bias, as these shift the industry mix towards private and public services. We also find that the industries that benefit the most in relative terms are all non-traded: construction, trade, and real estate, among the private services, and education and health, amongst the public services. Similarly, emerging trading sectors, such as hospitality and professional services stand to gain. The positive impacts on traded industries are too small to make a difference. These results highlight that infrastructure-based strategies are not neutral in terms of the industry mix. Moreover, with most of the benefits accruing to non-traded industries, such a development model that is heavily based on domestic demand may be unsustainable in light of Portugal’s current foreign account position

Suggested Citation

  • Alfredo Marvão Pereira & Rui Manuel Pereira, 2017. "Infrastructure Investment in Portugal and the Traded/Non-Traded Industry Mix," GEE Papers 0078, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Sep 2017.
    • Handle: RePEc:mde:wpaper:0078
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    References listed on IDEAS

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    More about this item

    Keywords

    Infrastructure Investment; Economic Performance; Industry Mix; Traded and Non-traded Sectors; VAR; Portugal.;
    All these keywords.

    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
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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