The Effect of Public Infrastructure on the Private Productive Sector of Spanish Regions

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 functi...

Full description

Saved in:
Bibliographic Details
Published in:Journal of regional science 2002-05, Vol.42 (2), p.301-326
Main Authors: Boscá, Joeé Emilio, Escribá, Francisco Javier, Murgui, María José
Format: Article
Language:English
Subjects:
Bgi / Prodig
Europe
Human geography
The Iberian peninsula
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary: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.
ISSN:0022-4146
1467-9787
DOI:10.1111/1467-9787.00260