Linking public investment to private investment

Diego Martínez

Economic Working Papers at Centro de Estudios Andaluces from Centro de Estudios Andaluces

Abstract: Literature describes a positive effect of public investment on private capital accumulation. This paper seeks to provide new empirical evidence on this latter relationship for the case of Spanish regions over period 1965-1997. We use a crowding-out theoretical framework and panel data methodology. The results show a positive effect of productive and social public investment (especially in education) on private investment. The spillover effects generated by productive infrastructures located in other regions do not seem to encourage private investment in neighbouring regions. Public consumption and interest rate exert a negative influence on private capital accumulation. These results are robust to changes in the econometric specification.

Keywords: Crowding-out; regional economics; investment; panel data. (search for similar items in EconPapers)
JEL-codes: C33 E62 H54 R53 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2005
New Economics Papers: this item is included in nep-geo, nep-mac and nep-pbe
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Citations: View citations in EconPapers (1)

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