Public highway spending and state spillovers in the USA

Abstract

The empirical results reported in this paper suggest that only about 20% of the aggregate effects of public investment in highways in the US are captured by the direct effects on each state output of public investment in the state itself. The remaining 80% correspond to the spillover effects from public investment in highways in other states. This result may provide an answer to the paradox in the literature that the findings of large effects at the aggregate level have not been matched at the regional level. This is because regional analysis has typically ignored the possible existence of spillover effects.

Impacts of Transport Infrastructure on Productivity and Economic Growth: Recent Advances and Research Challenges

“…Providing a new link or upgrading an existing link not only improve accessibility of the investment region, but also improve accessibility of other regions involved in the transport network. In a spatial econometric framework, positive spillover effects were confirmed by Pereira and Andraz (2004), Morrison Paul (2003, 2004), Cantos et al (2005), Jiwattanakulpaisarn et al (2011, 2012 and Tong, Yu, Cho, and Jensen (2013). For example, in a cost function-based model, Cohen and Morrison Paul (2003) observe cost saving benefits from airport improvements, enhanced by spillovers within the US air transport network across states.…”

Network infrastructure spillover in private productive sectors: evidence from Spanish high capacity roads

“…A large part of this interest is justified, as it is one of the largest infrastructure investments, with territorial as well as economic effects. A large number of studies have attempted to estimate economic impact, given the input into private sector production (Nadiri and Mamuneas, 1996;Garcı´a-Mila´and McGuire, 1997) and test whether or not there is wide scale spillover (Holtz-Eakin and Schwartz, 1995;Cohen and Morrison, 2002;Pereira and Andraz, 2004). Increases in the number of articles, however, have not given rise to clearly converging results.…”

The spillover effects of public capital on the Turkish private manufacturing industries in the geographical regions

“…For example, Boarnet (1998) found negative spillover effects of public infrastructure, while Pereira and Roca-Sagalés (2003) and Pereira and Andraz (2006) found positive spillover effects of public capital for almost all regions for Spain and Portugal, respectively. On the other hand, Holtz-Eakin and Schwartz (1995) suggest that there is no quantitatively important spillover effect of public capital between the states in the USA while Pereira and Andraz (2004) find positive spillover effects of public investment in highways for most of the states in the USA.…”