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Supply side effects of infrastructure spending

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  • Kosmopoulou, Georgia
  • Press, Robert

Abstract

We study the impact of stimulus infrastructure spending on the road construction industry. We find that a decline in private construction during the Great Recession led to a marketable increase in firm participation in the road construction industry. This short-term change in participation translated into longer-term benefits for the survival of firms in this concentrated industry. Infrastructure spending increased market competitiveness even after the funds were expended.

Suggested Citation

  • Kosmopoulou, Georgia & Press, Robert, 2022. "Supply side effects of infrastructure spending," Economics Letters, Elsevier, vol. 217(C).
    • Handle: RePEc:eee:ecolet:v:217:y:2022:i:c:s0165176522002051
    DOI: 10.1016/j.econlet.2022.110642
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    References listed on IDEAS

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    1. Alan J. Auerbach & Yuriy Gorodnichenko, 2012. "Measuring the Output Responses to Fiscal Policy," American Economic Journal: Economic Policy, American Economic Association, vol. 4(2), pages 1-27, May.
    2. Daniel J. Wilson, 2012. "Fiscal Spending Jobs Multipliers: Evidence from the 2009 American Recovery and Reinvestment Act," American Economic Journal: Economic Policy, American Economic Association, vol. 4(3), pages 251-282, August.
    3. Dakshina G. De Silva & Timothy Dunne & Georgia Kosmopoulou, 2003. "An Empirical Analysis of Entrant and Incumbent Bidding in Road Construction Auctions," Journal of Industrial Economics, Wiley Blackwell, vol. 51(3), pages 295-316, September.
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    Cited by:

    1. Cappelletti, Matilde & Giuffrida, Leonardo M., 2021. "Procuring survival," ZEW Discussion Papers 21-093, ZEW - Leibniz Centre for European Economic Research.
    2. Matilde Cappelletti & Leonardo M. Giuffrida & Gabriele Rovigatti, 2022. "Procuring Survival," CESifo Working Paper Series 10124, CESifo.

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    More about this item

    Keywords

    Procurement auctions; Stimulus spending; Firm exit;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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