Is there any relationship between public investment and economic growth in the spanish regions? (original) (raw)
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Estudios sobre la Economía …, 2002
This paper studies the empirical relationships that exist between public investment and per capita income growth over the period 1965-1995 in the different Spanish regions. Using a neoclassical growth model with public and human capital, we derive a convergence equation, estimated through panel data techniques. Besides providing evidence in favour of the conditional convergence hypothesis, the results show the negative effect of productive public investment on the rate of regional economic growth. Also, both public investment in education, although not very significant, and public resources devoted to health investment have a positive correlation to the increment of per capita income. Alternative estimates to deal with the possible endogeneity of some variables as well as changes in the specification, confirm most of the previous results. A simple two-sector model of endogenous growth is presented to explain these results.
Convergence Across Spanish Regions: New Evidence on the Effects of Public Investment
Review of Regional Studies, 2003
We examine the empirical relationship between public investment and per capita income growth in the Spanish regions over 1965-1997. Using a neoclassical growth model with public and human capital, a convergence equation is derived and estimated using panel data techniques. Besides providing evidence of conditional convergence, the results show a non-positive effect of productive-public investment on the rate of regional economic growth. The impact of public investment in education and health is not clear. Robustness checks addressing potential endogeneity and specification problems reaffirm our results. It is concluded that there are no simple recipes for effective regional investment policies.
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The aim of this paper is to add new arguments to the debate on the redesign of regional policies. An endogenous growth model is presented with two regions where the crucial issue for the removal of regional disparities is public investment. When testing the model using data obtained from Spanish regions, evidence of convergence is not found, in spite of
Public Capital Formation and Regional Development in Spain
Review of Development Economics, 1999
This paper uses a vector autoregression (VAR) approach to evaluate the effects of public investment on private sector performance in Spain. Empirical results suggest that public investment positively affected private investment, employment, and output at both aggregate and regional levels. The regions that benefited the most from public investment in the last two decades were Cataluña, Madrid, and Pais Vasco. These regions are among the largest economic areas in the country and among the ones with the highest GDP per capita. Accordingly, public investment, while an important factor for aggregate economic growth, has also been a source of increasing regional asymmetries.
Convergence and public investiment: Regional policies revisited
Regional economics: New …, 2008
This paper aims to add new arguments upon the debate on the effectiveness of regional policies. We present an endogenous growth model with two regions where the crucial issue for removing regional disparities is public investment. When the model is checked using data from Spanish regions, we do not find evidence of convergence, in spite of the redistributive character of the regional allocation of public investment.
The effects of public capital on economic growth have received a great deal of attention in the recent economic literature. In this context, our work is focused on the relationship between public and private capital at the regional level. Thus, the main purpose of this paper is to formulate a Multiregional Spatial VAR model for the Spanish regional system in order to both extend the class of VAR models applied in recent work on the topic and to reveal empirical evidence about the existence of crowding in and/or crowding out from Spanish regional public capital.
Public capital, regional productivity and spatial spillovers
Annals of Regional Science, 2005
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.
The Effect of Public Infrastructure on the Private Productive Sector of Spanish Regions
Journal of Regional Science, 2002
In this paper we analyze the effect of infrastructures on cost and productivity performance of the private productive sector of Spanish regions over the 1980-1993 period. 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 considers explicitly that some factors are quasi-fixed and can be away 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 it remains a sensible gap between existing and optimal public capital, and that we find that public capital promotes private investment in the long run.