Dynamics of Public Infrastructure, Industrial Productivity and Profitability

Shah, Anwar

doi:10.2307/2109539

Cited by 127 publications

(68 citation statements)

References 4 publications

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“…For both types of public capital, Nadiri and Mamuneas find significant productive effects. Shah (1992) estimates cost functions for 26 Mexican industries between 1970 and 1987 as functions of the public capital stock in electricity, communications, and transportation. His estimated elasticity is 0.05.…”

Section: Public Capitalmentioning

confidence: 99%

Productive government expenditures and long-run growth

Glomm

Ravikumar

1997

Journal of Economic Dynamics and Control

331

223

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The purpose of this paper is to review some of the recent developments in endogenous growth models. Specifically, our focus is on the growth effects of productive government spending in dynamic general equilibrium models. We use a simple overlapping generations model as our basic framework and illustrate the role of taxes and spending. We then examine several related issues: nonrivalry in publicly provided goods, existence and uniqueness of competitive equilibrium, endogenous public policy, ways of financing public expenditures, composition of publicly provided goods and services, and private alternatives. Finally, we review some empirical results related to output elasticity of public capital and educational expenditures.

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Section: Public Capitalmentioning

confidence: 99%

Productive government expenditures and long-run growth

Glomm

Ravikumar

1997

Journal of Economic Dynamics and Control

331

223

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“…Authors also began to relax restrictive assumptions in the theoretical framework by recognizing behavioral responses, and extending the representation of the technological base by allowing for various scale and homogeneity properties, and dynamics (Conrad and Seitz, 1994, Morrison and Schwartz, 1996and Shah, 1992. Such dual cost-based formulations, by including interaction terms and thus input-substitution and scale economy responses to public capital investment, allowed consideration of infrastructure-to-capital and infrastructure-to-output relationships that are crucial for evaluating the potential for public capital investment to stimulate growth (Morrison andSchwartz, 1996b, Batina, 2001).…”

Section: Introductionmentioning

confidence: 99%

“…In particular, much of the second wave of this literature (such as Hulten and Schwab, 1991, Shah, 1992, Nadiri and Manuneas, 1994, and Morrison and Schwartz, 1996a focused on estimating returns to the manufacturing sector from public infrastructure investment, and Paul et al (2001) analyzed infrastructure impacts for the agricultural sector. Others, such as Sturm (2001), who distinguished "sheltered" from "non-sheltered" sectors (where the latter includes both manufacturing and agriculture), compared returns for different sectors.…”

Section: Introductionmentioning

confidence: 99%

“…That is, although the focus on short run responsiveness for measurement of infrastructure effects was justified by Berndt and Hansson (1991), Shah (1992), and Morrison and Schwartz (1996a,b), it is useful to assess whether short run rigidities substantively limit input demand adjustment, and thus cost impacts. And inferring output enhancement from infrastructure 13 investment, rather than just focusing on production costs for given output levels, make our measures more comparable to their primal counterparts, and provide growth implications.…”

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confidence: 99%

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Public Infrastructure Investment, Costs, and Inter-State Spatial Spillovers in U.S. Manufacturing: 1982-96

Cohen

Paul

2001

SSRN Journal

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The size and significance of public infrastructure investment impacts on costs and productivity of private enterprise, and thus on economic health and growth, has proven nebulous to empirically substantiate. Various studies using alternative theoretical and econometric methodologies, and for different time periods, sectors, and countries, have tentatively established that such a productive impact exists and is statistically significant. It also seems smaller and more variable over time, space, and sector than was implied by initial studies on the "public capital hypothesis". One piece of the puzzle that has received little attention, however, is the role of spatial spillovers in driving infrastructure investment benefits. Such spillovers are not only conceptually important, but could also shed light on discrepancies between studies for different data, and particularly aggregation levels. In this study we apply a cost-based model to state-level U.S. manufacturing data, for capital, production and non-production labor, and materials inputs, and for the 1982-96 time period, in an attempt to untangle the private cost-saving contributions of inter-and intra-state public infrastructure investment. We carry out two kinds of spatial adaptations -a spatial autocorrelation adjustment and a spatial spillover theoretical modification -to the estimating system consisting of a Generalized Leontief cost function and input demand equations, to address this issue. We find that intra-state public infrastructure benefits appear larger in magnitude when inter-state spillovers are directly recognized, as well as being invariably statistically significant. Inter-state spillovers are also directly beneficial to manufacturing firms, although their contribution appears smaller in size when temporal serial correlation is recognized in addition to spatial correlation.

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“…Shah, 1992;Berndt et al, 1993;Nemoto et al, 1993), this su!ers from exactly the same problem. Such a short-run translog } where K is introduced in the quadratic form in the same way as the factor prices } has the further disadvantage that it is not possible to solve the equation yielding KH analytically (in closed form).…”

Section: Problems With the Traditional Short-run Cost Function Approachmentioning

confidence: 92%

Short cuts to dynamic factor demand modelling

Thomsen¹

2000

Journal of Econometrics

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By means of so-called virtual or shadow prices, short-run factor demands, short-run marginal costs, etc. can be derived from any long-run cost function. The traditional approach (short-run/restricted/conditional/variable cost functions) is criticized, and it is also shown that technological change, scale e!ects, etc. can be added to any cost function by means of disembodied factor-augmenting e$ciency indexes, easing the interpretations of the e!ects, but without loss of #exibility. It is shown that the trend-and scaleparameters of the (long-run) translog cost function can be directly translated into trendand scale-parameters of such e$ciency indexes. The techniques are illustrated on the well-known Berndt}Wood data set, using a (Diewert) long-run generalized Leontief (GL) cost function, and assuming that capital and labour are quasi-"xed.2000 Published by Elsevier Science S.A. All rights reserved.JEL classixcation: D21; D24; D45; E23

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Dynamics of Public Infrastructure, Industrial Productivity and Profitability

Cited by 127 publications

References 4 publications

Productive government expenditures and long-run growth

Productive government expenditures and long-run growth

Public Infrastructure Investment, Costs, and Inter-State Spatial Spillovers in U.S. Manufacturing: 1982-96

Short cuts to dynamic factor demand modelling

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