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

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Abstract

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 allow for the role of human capital accumulation; we test for the existence of a long-run relationship adopting panel techniques (Im et al., 2001; Pedroni, 1997, 1999) and assess explicitly the direction of the long-run forcing relationship; we test the significance of public capital within a non-parametric set-up based on the Free Disposal Hull. The results show that public capital has a significant impact on the evolution of total factor productivity in the Southern regions, while this is not true in most of the Northern regions. Also, this impact is to be mainly ascribed to the so-called core infrastructures (road and airports, harbours, railroads, water and electricity, telecommunications).

Suggested Citation

  • Sergio Destefanis & Vania Sena, 2003. "Public Capital and Total Factor Productivity. New Evidence from the Italian Regions," CELPE Discussion Papers 73, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.
    • Handle: RePEc:sal:celpdp:73
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    References listed on IDEAS

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    1. Holtz-Eakin, Douglas, 1994. "Public-Sector Capital and the Productivity Puzzle," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 12-21, February.
    2. J. M. Albala-Bertrand & E. C. Mamatzakis, 2001. "Is public infrastructure productive? Evidence from Chile," Applied Economics Letters, Taylor & Francis Journals, vol. 8(3), pages 195-198.
    3. Angel de la Fuente, "undated". "The effect of Structural Fund spending on the Spanish regions: an assessment of the 1994-99 Objective 1 CSF," Working Papers 2003-11, FEDEA.
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    Cited by:

    1. Phu Nguyen-Van & Thi Kim Cuong Pham & Duc-Anh Le, 2019. "Productivity and public expenditure: a structural estimation for Vietnam’s provinces," Asia-Pacific Journal of Regional Science, Springer, vol. 3(1), pages 95-120, February.
    2. Giuseppe Albanese & Marco M. Sorge, 2010. "On the Production Function for Italy," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 118(4), pages 401-416.

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    More about this item

    Keywords

    total factor productivity; public capital accumulation; long-run relationship; non-parametric frontiers;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General

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