Public infrastructure, private capital and the performance of manufactures: short and long run effects
Despite the general idea among economists that public capital is a necessary but not sufficient condition for regional economic development, there is not consensus on the quantification of its effect. It is our belief that the variety of results on infrastructure impact in the economic literature is due to the fact that it depends on a series of factors. Among them we can think of a different sectoral effect, the level of economic development in the area, so as the amount of the existing public capital stocks and their interaction with infrastructures in other regions. In this paper we focus on this latter condition, having into account that the evidence on public capital spillovers obtained in other studies is not homogeneous. This way, whereas in Holtz-Eakin and Schwartz (1995) the stock of highways in a state does not suppose benefits in productivity further its borders, Mas et al. (1997) obtain that the infrastructural endowment in the neighbours can be important. Using different functional forms, the first purpose of this paper is to shed light into the existence of public capital spillovers considering not only the physical interaction among regions but also other forms of relationship such as trade linkages. In a second step, we follow a discusion on the existence of other economic externalities that in case of not being considered could be the reason why we obtain biased estimations for regional returns to scale. Both purposes are treated through the use of spatial econometrics techniques in the Spanish regional case. Keywords: Public capital, Infrastructure Spillovers, External Effects, Spatial Econometrics
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Schankerman, Mark & Nadiri, M. Ishaq, 1986. "A test of static equilibrium models and rates of return to quasi-fixed factors, with an application to the Bell system," Journal of Econometrics, Elsevier, vol. 33(1-2), pages 97-118.
- Jeffrey I. Bernstein & Xiaoyi Yan, 1997.
"International R&D Spillovers between Canadian and Japanese Industries,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 30(2), pages 276-294, May.
- Jeffrey I. Bernstein & Xiaoyi Yan, 1995. "International R&D Spillovers between Canadian and Japanese Industries," NBER Working Papers 5401, National Bureau of Economic Research, Inc.
- Catherine J. Morrison & Donald Siegel, 1997. "External Capital Factors And Increasing Returns In U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 647-654, November.
- Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-1196, September.
- Seitz, Helmut, 1995. "The Productivity and Supply of Urban Infrastructures," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 29(2), pages 121-141, May.
- Frank Bruinsma & Sytze Rienstra & Piet Rietveld, 1997. "Economic Impacts of the Construction of a Transport Corridor: A Multi-level and Multiapproach Case Study for the Construction of the A1 Highway in the Netherlands," Regional Studies, Taylor & Francis Journals, vol. 31(4), pages 391-402.
- Bruinsma, F.R. & Rienstra, S.A. & Rietveld, P., 1995. "Economic impacts of the construction of a transport corridor: a multi-level and multi-apprach case study for the construction of the A1 highway in the Netherlands," Serie Research Memoranda 0011, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- Rafael Domenech Vilariño, 1993. "Funciones de costes para la banca española: un análisis con datos de panel," Investigaciones Economicas, Fundación SEPI, vol. 17(2), pages 263-284, May.
- de la Fuente, Angel, 2002. "On the sources of convergence: A close look at the Spanish regions," European Economic Review, Elsevier, vol. 46(3), pages 569-599, March.
- Angel de la Fuente & Vicente Salas Fum·s, "undated". "On the sources of convergence: A close look at the Spanish regions," Studies on the Spanish Economy 01, FEDEA.
- de la Fuente, A, 1996. "On the Sources of Convergence : A Close Look at the Spanish Regions," UFAE and IAE Working Papers 362.96, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- de la Fuente, Angel, 1996. "On the Sources of Convergence: A Close Look at the Spanish Regions," CEPR Discussion Papers 1543, C.E.P.R. Discussion Papers.
- Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
- Antonio Ciccone & Robert E. Hall, 1993. "Productivity and the Density of Economic Activity," NBER Working Papers 4313, National Bureau of Economic Research, Inc.
- Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
- Rosina Moreno Serrano & Manuel Artis Ortuno & Enrique Lopez Bazo & Jordi Surinach Caralt, 1997. "Evidence on the complex link between infrastructure and regional growth," Working Papers in Economics 19, Universitat de Barcelona. Espai de Recerca en Economia.
- Ai, Chunrong & Cassou, Steven P., 1997. "On public capital analysis with state data," Economics Letters, Elsevier, vol. 57(2), pages 209-212, December.
- Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, February.
- M. Ishaq Nadiri & Seongjun Kim, 1996. "International R&D Spillovers, Trade and Productivity in Major OECD Countries," NBER Working Papers 5801, National Bureau of Economic Research, Inc.
- 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.
- 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.
- 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.
- Nadiri, M. Ishaq & Mamuneas, Theofanis P., 1991. "The Effects of Public Infrastructure and R&D Capital on the Cost Structure and Performance of U.S. Manufacturing Industries," Working Papers 91-57, C.V. Starr Center for Applied Economics, New York University.
- M. Ishaq Nadiri & Theofanis P. Mamuneas, 1991. "The Effects of Public Infrastructure and R&D Capital on the Cost Structure and Performance of U.S. Manufacturing Industries," NBER Working Papers 3887, National Bureau of Economic Research, Inc.
- Appelbaum, Elie, 1978. "Testing neoclassical production theory," Journal of Econometrics, Elsevier, vol. 7(1), pages 87-102, February.
- Nadiri, M.I. & Kim, S., 1996. "International R&D Spillovers, Trade and Productivity in Major OECD Countries," Working Papers 96-35, C.V. Starr Center for Applied Economics, New York University.
- 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.
- Catherine J. Morrison & Amy Ellen Schwartz, 1992. "State Infrastructure and Productive Performance," NBER Working Papers 3981, National Bureau of Economic Research, Inc.
- 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.
- Teresa Garcia-Milà & Therese J. McGuire & Robert H. Porter, 1993. "The effect of public capital in state-level production functions reconsidered," Economics Working Papers 36, Department of Economics and Business, Universitat Pompeu Fabra.
- Holtz-Eakin, Douglas & Lovely, Mary E., 1996. "Scale economies, returns to variety, and the productivity of public infrastructure," Regional Science and Urban Economics, Elsevier, vol. 26(2), pages 105-123, April.
- Douglas Holtz-Eakin & Mary E. Lovely, 1995. "Scale Economies, Returns to Variety, and the Productivity of Public Infrastructure," NBER Working Papers 5295, National Bureau of Economic Research, Inc.
- Button, Kenneth J. & Lietham, Scott & McQuaid, Ronald W. & Nelson, John D., 1995. "Transport and Industrial and Commercial Location," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 29(2), pages 189-206, May.
- Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa98p165. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.