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Estimating production functions for the US states: the role of public and human capital

Author

Listed:
  • Nikos Benos

    (University of Ioannina)

  • Nikolaos Mylonidis

    (University of Ioannina)

  • Stefania Zotou

    (University of Ioannina)

Abstract

This paper estimates production functions for the 48 contiguous U.S. states over the 1970–2000 period employing recently developed panel estimators that tackle simultaneously parameter heterogeneity, cross-sectional dependence and non-stationarity. The findings suggest that labor, private capital and, when controlling for cross-sectional dependence, average schooling years exert a positive and significant effect on state income. In contrast, the income effect of public capital stock is negative. The state-specific coefficients indicate that this effect likely stems from the negative elasticity of income with respect to public capital in the states located primarily in the Snow Belt region.

Suggested Citation

  • Nikos Benos & Nikolaos Mylonidis & Stefania Zotou, 2017. "Estimating production functions for the US states: the role of public and human capital," Empirical Economics, Springer, vol. 52(2), pages 691-721, March.
    • Handle: RePEc:spr:empeco:v:52:y:2017:i:2:d:10.1007_s00181-016-1092-6
    DOI: 10.1007/s00181-016-1092-6
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    Cited by:

    1. Roman Matousek & Nickolaos G. Tzeremes, 2021. "The asymmetric impact of human capital on economic growth," Empirical Economics, Springer, vol. 60(3), pages 1309-1334, March.
    2. Makram El‐Shagi & Steven Yamarik, 2019. "State‐level capital and investment: Refinements and update," Growth and Change, Wiley Blackwell, vol. 50(4), pages 1411-1422, December.
    3. Zhezhi Hou & Shunan Zhao & Subal C. Kumbhakar, 2025. "Revisiting the Productivity Effects of Public Capital," Empirical Economics, Springer, vol. 68(3), pages 1233-1264, March.

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    More about this item

    Keywords

    Production function; Cross-sectional dependence; Panel analysis; Public capital; Human capital;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

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