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Optimal endowments of public investment: an empirical analysis for the spanish regions

Author

Listed:
  • Oscar Bajo-Rubio

  • Carmen Diaz-Roldan

  • M. Dolores Montavez-Garces

Abstract

The aim of this paper is to estimate the optimal endowments of public investment in Spanish regions. Starting from the standard dynamic neoclassical model, augmented with the public capital stock, the optimal condition for the provision of public capital would be that, in the steady state, the marginal productivities of both public and private capital should be equal. In the empirical application we will estimate a growth equation derived from a simple Cobb-Douglas production function, where the coefficients on the rates of investment in private and public capital would be their respective marginal productivities. The econometric estimation of such an equation with data for the Spanish regions would provide us estimates of the marginal productivities of both factors, which would allow us to infer whether public capital stock in the Spanish regions would be insufficient or otherwise excessive.

Suggested Citation

  • Oscar Bajo-Rubio & Carmen Diaz-Roldan & M. Dolores Montavez-Garces, 2001. "Optimal endowments of public investment: an empirical analysis for the spanish regions," ERSA conference papers ersa01p173, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa01p173
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    References listed on IDEAS

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    Cited by:

    1. Jaime Alonso-Carrera & María Jesús Freire-Serén & Baltasar Manzano, 2004. "Rentabilidad social de la inversión pública española en infraestructuras," Hacienda Pública Española / Review of Public Economics, IEF, vol. 170(3), pages 81-103, september.
    2. Antonio Morales & Pablo Brañas Garza, 2003. "Computational Errors in Guessing Games1," Economic Working Papers at Centro de Estudios Andaluces E2003/11, Centro de Estudios Andaluces.
    3. Boopen Seetanah, 2011. "Optimal endowments of transport investment: an empirical analysis for mauritius," Empirical Economics, Springer, vol. 40(3), pages 827-838, May.
    4. Salinas-Jimenez, M. del Mar, 2004. "Public infrastructure and private productivity in the Spanish regions," Journal of Policy Modeling, Elsevier, vol. 26(1), pages 47-64, January.
    5. Juan A. Núñez-Serrano & Francisco J. Velázquez, 2017. "Is Public Capital Productive? Evidence from a Meta-analysis," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 39(2), pages 313-345.

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    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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