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How do road infrastructure investments affect the regional economy? Evidence from Spain

Author

Listed:
  • Anna Matas Prat

    (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)

  • Adriana Karina Ruíz Marín

    (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)

  • Josep Lluís Raymond Bara

    (Departament d'Economia i Història Econòmica, Universitat Autonoma de Barcelona)

Abstract

This paper analyses the relationship between road infrastructure improvements and investment in capital assets. Using aggregate data at a provincial level for 1977-2008, an equation for machinery and equipment investment is estimated applying Panel Corrected Standard Errors. The results indicate that the long-term elasticities of investment in relation to market potential, GDP and average years of schooling are 0.90, 0.75 and 0.80, respectively. Additionally, the long run impact of a road infrastructure investment policy is assessed. We find that the elasticities of investment in machinery and equipment, capital stock and GDP in relation to travel time are 1.18, 0.33 and 0.11, respectively.

Suggested Citation

  • Anna Matas Prat & Adriana Karina Ruíz Marín & Josep Lluís Raymond Bara, 2016. "How do road infrastructure investments affect the regional economy? Evidence from Spain," Working Papers wpdea1610, Department of Applied Economics at Universitat Autonoma of Barcelona.
    • Handle: RePEc:uab:wprdea:wpdea1610
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    More about this item

    Keywords

    infraestructure; Regional investment; Market potential; Travel time;
    All these keywords.

    JEL classification:

    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics
    • 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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