Regional infrastructure and firm investment: theory and empirical evidence for Italy (original) (raw)

Public Infrastructure Investment and Efficiency in Italian Regions

Journal of Productivity Analysis, 2006

Evidence on growth rates in per capita income of Italian regions reveals persistent differences in development patterns between North and South Italy. While Northern regions manage to sustain high growth rates, Southern regions stagnate in low growth traps. To explain the phenomenon of different long-term growth paths, we use the stochastic frontier approach which allows to discriminate between the channels through which public infrastructure influences overall productivity. The main results are that the impact of core-infrastructure investment on efficiency is always positive. The impact of non-core infrastructure on efficiency is negative in the South and positive in the North.

Productivity and infrastructure in the Italian regions

1995

We address the issue of whether public infrastructure play an important role in determining factor productivity in Italy, and we show that the evidence is mixed. Public capital is significant in explaining output in most cases. However, whenthe attention is drawn on the long-run properties of the data, or when care is taken to rule out contemporaneous short-run effects, then public capital results to be either non-significant, or significant but of negligible importance.

Infrastructure and Economic Efficiency in Italian Regions

Networks & Spatial Economics, 2004

Using the stochastic frontier approach based on Farrel's index to measure technical and allocative efficiency, we investigate the level of productive efficiency in Italian regions for the period 1970–1994. We found a 31% of technical inefficiency and about 21% of allocative inefficiency. The analysis is extended to measure the impact of public capital puzzle on regional productivity. The results show that infrastructure play an important role and that railways and maritime capital have an higher degree of effectiveness than the provision of roads.

Public Capital and Economic Performance: Evidence from Italy ¤

Giornale degli Economisti, 2000

This paper addresses the issue of whether and by how much public capital can enhance economic performance. We apply di¤erent methodologies to Italian regional data for the period 1970-1994. The results are presented for Italy as a whole and for di¤erent macroregions, and for individual categories of public capital. For the Center and the South, the methodologies employed indicate a positive contribution of infrastructure investment to TFP growth, output, and cost reduction. However, the magnitude of the cost reducing e¤ect does not seem large enough to outweigh the social user cost of public capital. Also, we get mixed results on which types of infrastructure are most e¤ective.

Public Capital in the Private Sector of Italian Economy

2012

This paper investigates how the services of public capital affect the different sectors of private economy in Italy. For this purpose, we use a trans-logarithmic cost function which includes infrastructure’s services as a quasi-fixed free input. This approach allows to measure the effects of public capital in terms of cost reduction, productivity and distortion in the use of private inputs of production. We find that that the effects vary across industries and that major benefits are observed in Manufacturing and Energy. The sectors that obtain less benefits are Trade and Transport.

A multilevel analysis on the economic impact of public infrastructure and corruption on Italian regions

2009

This paper uses data contained in the Regional Public Accounts database to investigate the heterogeneity of the impact of public infrastructure across Italian regions basing the analysis also on institutional and political ground. The issue is here addressed linking the analysis of the impact of infrastructure on GDP with the issue of corruption by means of a random coefficient panel data model approach. I consider a novel objective measure of corruption that consists of the difference between a measure of the physical quantities of public infrastructure and the cumulative price government pays for public capital stocks. The empirical analysis confirms the existence of parameter heterogeneity across Italian regions and is also consistent with theoretical considerations that corruption negatively affects economic performance.

Infrastructure and regional growth : railways and the productivity gap in Italy after Unification

2017

The political unification of Italy in 1861 led to the establishment of a single market with a single currency. Market integration was the economic outcome of this process. At the same time, the Kingdom of Italy started a large infrastructure project to spread railways all over the country. Using tools from spatial econometrics, we find that railways played a positive effect on productivity, but this effect was stronger in the areas in which railways were already built. This effect is in line with New Economic Geography according to which infrastructure lead to a widening of territorial disparities.

Public capital and total factor productivity: New evidence from the Italian regions, 1970–98

Regional Studies, 2005

This paper analyses the relationship between industrial total factor productivity and public capital across the 20 Italian administrative regions. We add upon the existing literature in a number of ways: we analyse a longer period (1970-98); we allow for the role of human capital accumulation; we test for the existence of a long-run relationship between total factor productivity and public capital (through the panel techniques suggested in Im et al., 2001; and for weak exogeneity of public capital (Urbain, 1992); we assess the significance of public capital within a non-parametric set-up based on the Free Disposal Hull. The results confirm that public capital has a significant impact on the evolution of total factor productivity, particularly in the Southern regions. This impact is to be mainly ascribed to the core infrastructures (road and airports, harbours, railroads, water and electricity, telecommunications). Also, core infrastructures are found to be weakly exogenous.

Public Capital and Total Factor Productivity. New Evidence from the Italian Regions

2003

Public investment and growth: Lessons learned from 60-years experience in Southern Italy

Journal of Policy Modeling, 2020

This article analyses the contribution of public investment to economic growth in Southern Italy in the second half of the twentieth century (1951-2011). The Bai-Perron tests suggest that economic growth followed three distinct regimes: accelerated growth in the years 1951-1973 (average growth rate 5.3%); low growth in the period 1974-1995 (average growth rate 1.6%); zero growth on average after 1995. Using cointegration analysis, we find a positive effect of public investment on per unit of labour output of the Mezzogiorno in the whole period, 1951-2011. However, the estimates of the model show statistically significant parameters of public investment in the first regime, but not in the second regime, when economic growth is sustained by business investment and technical change. The last phase of growth sees the negative influence of the social and institutional environment on the functioning of the economy. The different impact of public investment on growth over time is ascribed to changes in the quality of institutions.

Regional infrastructure and firm investment: theory and empirical evidence for Italy (original) (raw)

Related papers