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Public Capital, Regional Productivity and Spatial Spillovers



This paper examines the impact of infrastructure on productivity in the various regions of Spain. Using the duality approach and panel data, we estimate the regional cost functions for the three main sectors of the economy for the period 1964-1991. We also estimate a production, and two separate variables are used to establish whether the different categories of public capital have varying effects on costs. Results show that public infrastructure noticeably reduces private costs and increases overall productivity. Finally, there is a study of the existence of spillover effects in transport infrastructure. Estimations suggest that such effects are of some relevance, a fact which may have serious implications for public policy on infrastructure.

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  • Carlos Gil Canaleta & Pedro Pascual Arzoz & Manuel Rapun Gurate, 1998. "Public Capital, Regional Productivity and Spatial Spillovers," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 9811, Departamento de Economía - Universidad Pública de Navarra.
  • Handle: RePEc:nav:ecupna:9811

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    References listed on IDEAS

    1. Douglas Holtz-Eakin & Amy Schwartz, 1995. "Spatial productivity spillovers from public infrastructure: Evidence from state highways," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(3), pages 459-468, October.
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    3. Evans, Paul & Karras, Georgios, 1994. "Is government capital productive? Evidence from a panel of seven countries," Journal of Macroeconomics, Elsevier, vol. 16(2), pages 271-279.
    4. Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-1196, September.
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    6. Berndt, Ernst R & Hansson, Bengt, 1992. " Measuring the Contribution of Public Infrastructure Capital in Sweden," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(0), pages 151-168, Supplemen.
    7. Ezequiel Uriel Jiménez & Francisco Pérez García & Matilde Mas Ivars & Joaquín Maudos Villarroya, 1993. "Capital Público Y Productividad De La Economía Espanola," Working Papers. Serie EC 1993-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    8. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, March.
    9. Ratner, Jonathan B., 1983. "Government capital and the production function for U.S. private output," Economics Letters, Elsevier, vol. 13(2-3), pages 213-217.
    10. Robert J. Barro & Xavier Sala-I-Martin, 1992. "Public Finance in Models of Economic Growth," Review of Economic Studies, Oxford University Press, vol. 59(4), pages 645-661.
    11. Alicia H. Munnell, 1990. "How does public infrastructure affect regional economic performance?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 34, pages 69-112.
    12. Berndt, Ernst & Hansson, Bengt, 1992. "Measuring the Contribution of Capital in Sweden," Working Paper Series 365, Research Institute of Industrial Economics.
    13. Grossman, Herschel I & Lucas, Robert F, 1974. "The Macro-Economic Effects of Productive Public Expenditures," The Manchester School of Economic & Social Studies, University of Manchester, vol. 42(2), pages 162-170, June.
    14. Nadiri, M Ishaq & Mamuneas, Theofanis P, 1994. "The Effects of Public Infrastructure and R&D Capital on the Cost Structure and Performance of U.S. Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 22-37, February.
    15. Morrison, Catherine J & Schwartz, Amy Ellen, 1996. "State Infrastructure and Productive Performance," American Economic Review, American Economic Association, vol. 86(5), pages 1095-1111, December.
    16. Seitz, Helmut, 1994. "Public capital and the demand for private inputs," Journal of Public Economics, Elsevier, vol. 54(2), pages 287-307, June.
    17. Seitz, Helmut, 1993. "A Dual Economic Analysis of the Benefits of the Public Road Network," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 27(3), pages 223-239, September.
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    Cited by:

    1. Valter Di Giacinto & Giacinto Micucci & Pasqualino Montanaro, 2012. "Network effects of public transport infrastructure: Evidence on Italian regions," Papers in Regional Science, Wiley Blackwell, vol. 91(3), pages 515-541, August.
    2. Antonio Alvarez & Carlos Arias & Luis Orea, 2006. "Econometric testing of spatial productivity spillovers from public capital," Hacienda Pública Española, IEF, vol. 178(3), pages 9-21, September.
    3. Dino Martellato, 2006. "Growth and Inflation Disparities in Corridor V," Working Papers 2006_19, Department of Economics, University of Venice "Ca' Foscari".
    4. Miguel Gómez-Antonio & Bernard Fingleton, 2012. "Regional productivity variation and the impact of public capital stock: an analysis with spatial interaction, with reference to Spain," Applied Economics, Taylor & Francis Journals, vol. 44(28), pages 3665-3677, October.
    5. Miguel Márquez & Julián Ramajo & Geoffrey Hewings, 2010. "Measuring the spillover effects of public capital: a bi-regional structural vector autoregressive analysis," Letters in Spatial and Resource Sciences, Springer, vol. 3(3), pages 111-125, October.
    6. Sapkota, Jeet Bahadur, 2014. "Access to Infrastructure and Human Development:Cross-Country Evidence," Working Papers 70, JICA Research Institute.
    7. 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.
    8. Torrisi, Gianpiero, 2009. "Infrastructures and economic performance: a critical comparison across four approaches," MPRA Paper 18688, University Library of Munich, Germany.
    9. Torrisi, Gianpiero, 2009. "A multilevel analysis on the economic impact of public infrastructure and corruption on Italian regions," MPRA Paper 15487, University Library of Munich, Germany.
    10. Márquez, Miguel A. & Ramajo, Julián & Hewings, Geoffrey J. D., 2011. "Public Capital and Regional Economic Growth: a SVAR Approach for the Spanish Regions," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 21, pages 199-223.
    11. repec:eee:retrec:v:63:y:2017:i:c:p:13-26 is not listed on IDEAS
    12. Chiara Del Bo & Massimo Florio & Silvia Vignetti & Emanuela Sirtori, 2011. "Additionality and regional development: are EU Structural Funds complements or substitutes of national Public Finance?," Working Papers 201101, CSIL Centre for Industrial Studies.

    More about this item


    regional infrastructures; duality theory; productivity; externalities.;

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes


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