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Infrastructure and Public R&D Investments, and the Growth of Factor Productivity in US Manufacturing Industries

  • M. Ishaq Nadiri
  • Theofanis P. Mamuneas

In this paper we examine the effects of publicly financed infrastructure and R&D capital on the cost structure and productivity performance of twelve two-digit U.S. manufacturing industries. A general framework is developed to measure contribution of demand, relative input prices, technical change, as well as publicly financed capital on total factor productivity growth. The magnitude of the contribution of these sources varies considerably across industries: in some changes in demand dominate while in others changes in technology or relative prices are the main contributors. Publicly financed infrastructure and R&D capital contribute to productivity growth. However, the magnitudes of their contribution vary considerably across industries and on the whole they are not the major contributors to TFP in these industries.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4845.

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Date of creation: Aug 1994
Date of revision:
Publication status: Published as "Public R&D Policies and Cost Behavior of the US Manufacturing Industries", Journal of Public Economics, Vol. 63, no. 1 (December 1996): 57-81.
Handle: RePEc:nbr:nberwo:4845
Note: PR
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  1. David Aschauer, 1988. "Is public expenditure productive?," Staff Memoranda 88-7, Federal Reserve Bank of Chicago.
  2. John A. Tatom, 1991. "Public capital and private sector performance," Review, Federal Reserve Bank of St. Louis, issue May, pages 3-15.
  3. Bernstein, Jeffrey I. & Nadiri, M. Ishaq, 1990. "Product Demand, Cost Of Production, Spillovers And The Social Rate Or Return To R&D," Working Papers 90-53, C.V. Starr Center for Applied Economics, New York University.
  4. Randall W. Eberts, 1986. "Estimating the contribution of urban public infrastructure to regional growth," Working Paper 8610, Federal Reserve Bank of Cleveland.
  5. Garcia-Mila, Teresa & McGuire, Therese J., 1992. "The contribution of publicly provided inputs to states' economies," Regional Science and Urban Economics, Elsevier, vol. 22(2), pages 229-241, June.
  6. Ernst R. Berndt & Bengt Hansson, 1991. "Measuring the Contribution of Public Infrastructure Capital in Sweden," NBER Working Papers 3842, National Bureau of Economic Research, Inc.
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