Public capital, regional productivity and spatial spillovers

This paper examines the impact of infrastructure on productivity in the various regions of Spain. Using the duality approach and panel data, we estimate regional cost functions for the three main sectors of the economy for the period 1964–1991. Public capital is included as an unpaid factor of production, and two separate variables are used to establish whether the different categories of public capital have varying effects on costs. Results show that public infrastructure noticeably reduces private costs and increases overall productivity. We also estimate a production function with regional and time fixed effects. Finally, we include a study of spillover effects in transport infrastructure. Estimations suggest that such effects are of some relevance, a fact which may have serious implications for public policy on infrastructure.

Authors and Affiliations

1. Departamento de Economía, Universidad Pública de Navarra, Campus de Arrosadía, 31006, Pamplona, Spain

   Roberto Ezcurra, Carlos Gil, Pedro Pascual & Manuel Rapún

Corresponding author

Correspondence to Manuel Rapún.

Received: January 2002 / Accepted: November 2004

All authors are members of the Academic Robotics Group. In listing The Academic Robotics Group, the authors are endeavoring to place each of the participant institutions on an equal footing in terms of effort and authorship. M. A. Talamini is serving as presenter.

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