Public Infrastructure and Regional Economic Development : A Simultaneous Equations Approach

Duffy-Deno, Kevin T.; Eberts, Randall W.

doi:10.26509/frbc-wp-198909

Cited by 54 publications

(71 citation statements)

References 2 publications

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“…Much of the research to date has been primarily providing a better understanding of the underlying factors that affect the interaction between highway investment and economic development. Research and practice tend to support the following conclusions (McQuaid et al, 2004;Flyvbjerg et al, 2003; EDRG and CSI, 2001;Weisbrod, 2000;Brown, 1999;Apogee Research Inc., and Greenhorne & O'Mara, 1998;Eberts, 1990;and Drew, 1990):…”

Section: Key Findings From the Literature Reviewmentioning

confidence: 99%

Section: Issues On the Highway Investment/economic Growth Relationshipmentioning

confidence: 99%

“…Several fundamental public policy questions were raised, most notably regarding the magnitude of the contribution of public infrastructure to the national economic output, and the relative productivity of private versus public capital investment (Costa et al, 1987;Eberts, 1990). The policy implications of this debate are as follows: if public infrastructure investment not only increases economic productivity significantly, but does so at a rate above that of private capital investment, public policy decision-makers would be well advised to maintain or increase infrastructure investment at a high level.…”

Section: Private Versus Public Sector Investmentmentioning

confidence: 99%

“…This implies that, for instance, a one percent increase in spending on highway infrastructure led to 0.19 percent increase in manufacturing output. Eberts (1990) found that public capital stock makes a positive and significant contribution to manufacturing output;however, its output elasticity of 0.03 is small relative to the magnitude of the other inputs:0.7 for labor and 0.3 for private capital.An econometric analysis at the state level cited in Smith (1994), as part of a FHWA research program, indicated that for a one percent increase in highway capital stock, gross state product will increase by 0.121 to 0.127 percent. In a study conducted in Indiana (Smith, 1997) that examined the effect of public capital stock and its components on state output in Indiana, the output elasticity of public capital was found to be lower.…”

mentioning

confidence: 99%

“…Highways have effects on two spatial scales: the local and the regional. The linkages between physical infrastructure and those that use it are more direct when the analysis focuses on smaller geographical areas (Eberts, 1990).The larger the area (e.g., a state or nation as compared to a county) the more likely that impacts (such as the location movements of businesses) will be seen as an internal redistribution of activity within the area rather than a generative, new activity. Generative impacts occur when a transportation investment catalyzes regional economic growth that would not have occurred somewhere else in the state.…”

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confidence: 99%

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Economic Development Effects of INDOT Transportation Projects

Gkritza¹,

Labi²,

Sinha³

2007

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Prepared in cooperation with the Indiana Department of Transportation and Federal Highway Administration. AbstractThe evaluation of transportation projects has traditionally been carried out in the context of economic efficiency, in terms of savings in travel time, vehicle operating cost, and safety. The wider and longer-term effects on economic development (i.e., job, income and business growth) are a concern of transportation planners and decision-makers but have been often overlooked due to the lack of a reliable impact estimation methodology and/or data. Information on economic development impacts is valuable for understanding the total effect of projects and therefore, for a more balanced justification of proposed transportation infrastructure investments. This study extends the traditional transportation impact framework by examining how different types of highway improvements that have been programmed for implementation in the State of Indiana can affect the state's economy, and how project-and location-specific factors interact to stimulate economic development. Temporal, spatial, and project characteristics are duly considered.The end product of this research is a quantitative tool that can be used at the project development phase by INDOT staff to estimate the economic development effects of different types of highway investments and make better decisions regarding highway investment. The study results provide a better understanding of the interrelationships among economic development, type of highway improvement and geographical location, and how investments in highway infrastructure can be ranked and prioritized based on sound economic development criteria. This study illustrates the types of data necessary to document these effects, and demonstrates how analysis can be carried out and ultimately improved. The study results can also assist INDOT to develop a quantitative approach to establish weights for the economic development criterion in a bid to rank and select projects based on their economic development potential and increase the efficiency of highway investment. Finally, the questionnaire survey targeted to transportation agencies and organizations across Indiana that have interests in economic development aspects could improve the understanding of economic development practices in the state. The survey results shed light into the circumstances under which economic developers and transportation agencies assess such effects, the measures that are or should typically be used, their associated weights, and the strategies/tools that are most often used. . Transportation planners and decision-makers have long shown concern about how transportation investments and services shape economic development. For large and more complex project in particular (and where the role of public participation is significant), information on the wider economic development impacts of transportation (e.g., changes in the regional industry, commerce, agriculture, and income, etc.) becomes valuable for measuring...

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Section: Key Findings From the Literature Reviewmentioning

confidence: 99%

Section: Issues On the Highway Investment/economic Growth Relationshipmentioning

confidence: 99%

Section: Private Versus Public Sector Investmentmentioning

confidence: 99%

mentioning

confidence: 99%

mentioning

confidence: 99%

See 3 more Smart Citations

Economic Development Effects of INDOT Transportation Projects

Gkritza¹,

Labi²,

Sinha³

2007

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Sub‐national Government Capital Spending in Indonesia: Level, Structure, and Financing

Lewis

Oosterman

2010

Public Admin & Development

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SUMMARYSub-national government capital spending is important for both public service delivery and economic development. Currently, Indonesian sub-national public capital spending appears barely sufficient to cover the annual depreciation of its fixed assets. A substantial proportion of local government investment spending goes to create relatively unproductive assets, such as administrative office buildings. Sub-national governments finance their capital acquisitions out of gross operating budgets and have thus far not used, to any great extent, either borrowed funds or their significant cash reserves for such purposes. Indonesian sub-nationals need to spend more on capital than they do now and also need to focus that spending on more useful types of infrastructure. The major constraints to increasing capital spending at the sub-national level are not related to a dearth of finance, but regulatory rigidities in budget preparation and implementation and, most importantly, a lack of capacity to plan, design and implement investment projects.

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Externalities and Local Economic Growth in Manufacturing Industries

Usaï

Paci

2003

European Regional Growth

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The growing interest on the economic geography issues has provided new vigour to the research efforts aiming at explaining economic phenomena without neglecting space. In particular several studies have focused on the role of spatially bounded externalities on firms agglomeration processes at the local industry level. This paper has a twofold objective. Firstly, we outline a general eclectic model of local economic growth to provide the theoretical background to guide the econometric analysis. The model includes a general taxonomy of different factors which may explain economic growth in a specific industry and location. Secondly, we assess the role of a large set of potential determinants of the process of local agglomeration of economic activity and we address the issue of spatial association of the local growth processes. We apply our model to the case of Italy making use of a very ample database on socio-economic indicators for 784 Local Labour Systems and 97 manufacturing sectors over the period 1991-96. Our econometric results show that local growth in Italy is not a homogeneous process. On the contrary, it is characterized by significant differences across macro regions with respect to the relevance of the explanatory factors. Among the most important determinants of local industry growth, it is worth mentioning the positive role of the diversity externalities. We also find robust evidence of the negative influence of specialisation externalities on labour dynamics at the local industry level. Moreover, we have assessed the effects of other determinants of local growth like: human capital, social environment and public infrastructures. The analysis of spatial dynamics, carried out for the North-East and Centre-North, shows that at the local industry level there are polarisation phenomena at work and that employment dynamics are self-contained within the boundaries of local labour systems once we have controlled for a large set of local determinants.JEL: R11, R12, L60, O52

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Public Infrastructure and Regional Economic Development : A Simultaneous Equations Approach

Cited by 54 publications

References 2 publications

Economic Development Effects of INDOT Transportation Projects

Economic Development Effects of INDOT Transportation Projects

Sub‐national Government Capital Spending in Indonesia: Level, Structure, and Financing

Externalities and Local Economic Growth in Manufacturing Industries

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