Public investment and convergence in the Spanish regions (original) (raw)

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.

Is there any relationship between public investment and economic growth in the spanish regions?

This paper offers an introduction to the empirical relationships between public investment and regional economic growth in Spain over the period 1965-1995. We use a neoclassical theoretical framework for two regions with public capital subject to congestion and spillover effects from infrastructure situated in neighbouring regions. Next we derive a convergence equation that is estimated using panel data techniques. This enables us to control unobserved specific characteristics; furthermore, we take account of possible endogeneity problems. Our provisional results suggest that public investment has not played an important role in regional growth rates during period specified.

Convergence and public investment: Regional policies revisited

2005

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

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.

Optimal endowments of public capital: An empirical analysis for the Spanish regions

Regional Studies, 2005

The aim of this paper is to analyse the degree of optimality of the endowments of public capital in the Spanish regions. To this end, we will estimate a growth equation derived from a simple production function, where the coefficients on the rates of investment in private and government capital would be their respective marginal products. By comparing the estimates of the marginal products for both factors, we would be able to infer whether the public capital stock in the Spanish regions is underprovided or not.

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.

Government policy and industrial investment determinants in Spanish regions

Regional Science and Urban Economics, 2009

The aim of this paper is to analyse the public determinants of industrial investment in Spanish regions by means of a dynamic panel regression model with data collected from 1980 to 2000. We derive and estimate an investment function where income growth (accelerator), input prices and profits appear as determinants of industrial investment. In addition, our model specification accounts for the influence of both technological and human capital and public infrastructure, which may affect regional efficiency and, therefore, industrial investment. Our results indicate that investment has been sensitive to public infrastructure, particularly in the 1980s, whereas the effect of technological and human capital was felt later in time.