Infrastructure in the Framework of Production Functions: Evidence of Eu Member States at the Regional Level

Abstract

Infrastructure development is seen as an essential tool for boosting economic growth. Infrastructure is funded under various programs to contribute to economic growth, and reduce regional disparities. Evaluations of the results achieved have to be carried out to develop efficient infrastructure development and investment allocation policy. This is highlighted in both the reports of policymakers and scientific publications. The main limitation of these studies is that they focus on assessing the return on infrastructure development at the national level, leaving the question of what outcomes were achieved at the regional level. This article aims to evaluate the economic outcomes of transport and ICT infrastructure development at the NUTS 2 regional level in the EU-28 countries, using 2000–2019 data. The research is based on the neoclassical production function complementing it with an infrastructure indicator. Based on previous research, it is hypothesized that economic outcomes may depend on the institutional environment of the region. Consequently, the research model specification is supplemented by government quality as a possible moderator. Research findings suggest just motorway and internet infrastructure are significantly positively related to production outcomes. Estimations show higher government quality and less corruption are related to the bigger production output of the infrastructure input.

Navigating the Business Landscape: The Influence of Infrastructure, Financial Inclusion, Innovation, and Government Policy on Indonesian MSMEs

“…b. Infrastructure: The standard of transportation networks, the availability of utilities, and the technological infrastructure derived from published works are examples of indicators (Ferrarez et al, 2020;Mačiulytė-Šniukienė et al, 2022;Savchenko, 2022).…”

“…Better infrastructure promotes business growth, lowers transaction costs, and improves accessibility, all of which improve MSME performance. Research has repeatedly demonstrated that infrastructure development and MSME performance are positively correlated, underscoring the need of a favorable physical environment for company success (Cockburn et al, 2013;Fullerton Jr et al, 2013;Hidayat & Prasetyo, 2023;Mačiulytė-Šniukienė et al, 2022). H1: The performance of Indonesian MSMEs is positively and significantly correlated with the quality of the infrastructure (including transportation networks, utility access, and technological infrastructure).…”

Increasing Farmers' Income in the Agricultural Sector in Central Java

“…Research has indicated a favorable correlation between company performance and transportation infrastructure, with expenditures in this area necessary to maintain growth across several economic sectors, including the agrifood sector (Agnusdei et al, 2022). Furthermore, research has shown that the construction of highways and internet infrastructure has a substantial impact on production results and that infrastructure investments are linked to higher production output when there is less corruption and better government quality (Mačiulytė-Šniukienė et al, 2022). Thus, the body of research supports the idea that infrastructure development is crucial for enhancing the effectiveness of the supply chain and maximizing agricultural productivity (Higgins et al, 2023).…”

“…An approach to measure the influence of important variables, such as governmental policies, on healthcare supply chains in emerging nations was put forth (Dixit et al, 2023). Furthermore, (Mačiulytė-Šniukienė et al, 2022) focused on the moderating influence of government quality when examining the economic results of infrastructure development at the regional level. All of these results point to the importance of government policies in fostering infrastructure development and improving supply chain effectiveness in the agriculture industry.…”

The Impact of Infrastructure Development, Education, Tourism, and Agriculture on Regional Economic Growth in Indonesia

“…Globally, infrastructure improvement is widely acknowledged as a stimulant for economic expansion. The literature has extensively examined the benefits that well-planned and executed infrastructure projects can have on local and national economies [17]- [19]. Infrastructure investment can lead to higher production, efficiency, and competitiveness for a nation [20].…”