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New evidences on the link between public capital and economic growth from a small island economy

Author

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  • Khadharoo, Jameel
  • Seetanah, Boopen

Abstract

The contribution of public capital on economic growth has been the focus of only few studies and has to date focused mainly on developed countries. Moreover it is only lately that the link has been analysed in a dynamic framework, allowing for feedback effects. The empirical literature has hardly dealt with small economies such as Mauritius. The present paper builds on a production function approach, using a unique time series dataset over the period 1950 – 2000, to derive the association between public capital and economic performance and economic growth for Mauritius. Given the non-stationary characteristics of the data, a vector-error-correction mechanism (VECM) is used to model the dynamics. Public capital is shown to have significantly contributed to Mauritian economic performance. Moreover results suggest that there may be indirect effects via private capital accumulation as well.

Suggested Citation

  • Khadharoo, Jameel & Seetanah, Boopen, 2006. "New evidences on the link between public capital and economic growth from a small island economy," Conference papers 331454, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
  • Handle: RePEc:ags:pugtwp:331454
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    File URL: https://ageconsearch.umn.edu/record/331454/files/2397.pdf
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    References listed on IDEAS

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    1. Gould, David M, 1994. "Immigrant Links to the Home Country: Empirical Implications for U.S. Bilateral Trade Flows," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 302-316, May.
    2. Keith Head & John Ries, 1998. "Immigration and Trade Creation: Econometric Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 47-62, February.
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    Cited by:

    1. Worku, Urgaia R., 2020. "The Importance of Human Capital Resources for Sustainable Economic Growth in East African," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 29(01), April.

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