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The Effect Of Public Infrastructures On The Private Productive Sector Of Spanish Regions

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  • Boscá, José Emilio
  • Escribá, Javier
  • Murgui, María José

Abstract

In this paper we analyze the effect of infrastructure on the cost and productivity performance of the private productive sector of Spanish regions over the period 1980-1993. We use a dual approach based on cost functions that allows us to recover the usual parameters estimated with production functions. In addition, we obtain rates of return and cost elasticities of production factors at the regional level. Our framework explicitly considers that some factors are quasi-fixed and their volume can differ from their optimal endowment levels. Our results indicate that the public sector has contributed significantly to enhance productivity and reduce costs in the private sector of almost every Spanish region. Nevertheless, there is still scope for the government to continue its investment efforts, given that there remains an appreciable gap between observed and optimal public capital, and we find that in the long run, public capital promotes private investment. Copyright 2002 Blackwell Publishers Inc.
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  • Boscá, José Emilio & Escribá, Javier & Murgui, María José, 2000. "The Effect Of Public Infrastructures On The Private Productive Sector Of Spanish Regions," ERSA conference papers ersa00p165, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa00p165
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    1. Carmit Shwartz & W. Erwin Diewert & Kevin J. Fox, 2014. "Consumer Benefits of Infrastructure Services," Discussion Papers 2014-17, School of Economics, The University of New South Wales.
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    7. Holtz-Eakin, Douglas, 1994. "Public-Sector Capital and the Productivity Puzzle," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 12-21, February.
    8. 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.
    9. 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.
    10. Garcia-Mila, Teresa & McGuire, Therese J & Porter, Robert H, 1996. "The Effect of Public Capital in State-Level Production Functions Reconsidered," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 177-180, February.
    11. Seitz, Helmut, 1994. "Public capital and the demand for private inputs," Journal of Public Economics, Elsevier, vol. 54(2), pages 287-307, June.
    12. Morrison, Catherine J, 1988. "Quasi-Fixed Inputs in U.S. and Japanese Manufacturing: A Generalized Leontief Restricted Cost Function Approach," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 275-287, May.
    13. David Alan Aschauer, 1989. "Public investment and productivity growth in the Group of Seven," Economic Perspectives, Federal Reserve Bank of Chicago, issue Sep, pages 17-25.
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    Cited by:

    1. 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.
    2. López-Bazo, Enrique & Moreno, Rosina, 2008. "Does human capital stimulate investment in physical capital?: Evidence from a cost system framework," Economic Modelling, Elsevier, vol. 25(6), pages 1295-1305, November.
    3. Roibás, David & Baños, José, 2010. "The Impact of Infraestructures in Provincial Production: Assesing its Dynamic Impact," Efficiency Series Papers 2010/05, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    4. Ward Romp & Jakob de Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(s1), pages 6-52, April.
    5. Alfredo M. Pereira & Jorge M. Andraz, 2013. "On The Economic Effects Of Public Infrastructure Investment: A Survey Of The International Evidence," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(4), pages 1-37, December.
    6. Antoni Castells & Daniel Montolio & Albert Solé, 2006. "Infrastructure investment across Spanish regions: determinants and calculation of an expenditure needs index," Hacienda Pública Española, IEF, vol. 178(3), pages 23-54, September.
    7. Teresa Garcia-Milà & José Garcia Montalvo, 2013. "A new approach to measure the impact of highways on business location with an application to Spain," Economics Working Papers 1412, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Ozbay, Kaan & Ozmen-Ertekin, Dilruba & Berechman, Joseph, 2007. "Contribution of transportation investments to county output," Transport Policy, Elsevier, vol. 14(4), pages 317-329, July.
    9. 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.
    10. repec:spr:anresc:v:60:y:2018:i:1:d:10.1007_s00168-017-0852-3 is not listed on IDEAS
    11. repec:eee:retrec:v:63:y:2017:i:c:p:13-26 is not listed on IDEAS
    12. Álvaro Hurtado Rendón & Luis Alfredo Molina, 2012. "Inestabilidad institucional, evidencia para Colombia: la violencia y el crecimiento económico en el periodo 1950-2010," DOCUMENTOS DE TRABAJO CIEF 010572, UNIVERSIDAD EAFIT.
    13. Silvia Bertarelli, 2006. "Public capital and growth," Politica economica, Società editrice il Mulino, issue 3, pages 361-398.
    14. Rodríguez-Álvarez, Ana & Tovar de la Fe, Beatriz, 2009. "Reformas regulatorias y eficiencia en el sector portuario español," Efficiency Series Papers 2009/05, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).

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