Returns to Local and Transport Infrastructure under Regional Spillovers

Abstract

This article pays special attention to the spatial dimension of public capital in regional economic growth. We assume that the effect of infrastructure on productivity depends on the type of public infrastructure in question: that is, local infrastructures enhance economic activity in the area where they are located, whereas transport and communication infrastructure may produce both benefits in the area where they are located and positive or negative spillovers to other regions. We also obtain conclusions on whether the link between growth and public capital depends on the amount of existing public capital stocks. Results for the Spanish provinces during a long time period suggest that the returns to local infrastructure are much greater than the returns to transportation, although in both cases, we observe strong decreasing returns to their accumulation. Finally, negative spillovers across regions in transport capital investments are obtained.

Transportation and Regional Economic Development: Analysis of Spatial Spillovers in China Provincial Regions

“…This is partly due to its territorial effect and capability to reduce costs and increase economic production capacity. Moreno and López-Bazo (2007) have identified the existence of negative spillovers across regions. Álvarez-Ayuso and Delgado-Rodriguez (2012) have found positive and negative spillovers in their study of the relationship between the high-capacity network and regional economic activity.…”

Institutions and the Thirst for ‘Prestige’ Transport Infrastructure

“…In the case of Europe, this skepticism has been highlighted by both single-country (e.g., Bronzini & Piselli, 2009;Cadot, Röller, & Stephan, 1999;Stephan, 2000) and crossnational research (e.g., Cappelen et al, 2003;Crescenzi & Rodríguez-Pose, 2012), which increasingly reports much lower elasticities than those found by Aschauer (1989) or even insignificant coefficients. Similarly, spatial analyses searching for spillovers from different types of infrastructure find that economic growth effects are limited at best to certain categories of public capital (e.g., del Bo & Florio, 2012;del Bo, Florio, & Manzi, 2010;Moreno & López-Bazo, 2007).…”

Regional Public Stock Reductions in Spain: Estimations from a Multiregional Spatial Vector Autorregressive Model

“…The complexities of the spatial allocation and the manner in which spatial spillover effects move across the region system require formal analysis of the kind proposed in this paper 1 . It is well known that the empirical analysis of the aggregate effects of regional public capital provision requires spillover effects to be considered (see, for example, Boarnet 1998, Moreno, López-Bazo 2007. These spillover effects could play a key role in regional economic performance, since they can be inferred as externalities that could lead to increasing returns to scale.…”