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Public Capital and Total Factor Productivity. New Evidence from the Italian Regions

This paper analyses the relationship between industrial total factor productivity and public capital across the 20 Italian administrative regions. We add upon the existing literature in a number of ways: we allow for the role of human capital accumulation; we test for the existence of a long-run relationship adopting panel techniques (Im et al., 2001; Pedroni, 1997, 1999) and assess explicitly the direction of the long-run forcing relationship; we test the significance of public capital within a non-parametric set-up based on the Free Disposal Hull. The results show that public capital has a significant impact on the evolution of total factor productivity in the Southern regions, while this is not true in most of the Northern regions. Also, this impact is to be mainly ascribed to the so-called core infrastructures (road and airports, harbours, railroads, water and electricity, telecommunications).

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Paper provided by CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy in its series CELPE Discussion Papers with number 73.

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Date of creation: Jul 2003
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Handle: RePEc:sal:celpdp:73
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  1. J. M. Albala-Bertrand & E. C. Mamatzakis, 2001. "Is public infrastructure productive? Evidence from Chile," Applied Economics Letters, Taylor & Francis Journals, vol. 8(3), pages 195-198.
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