Public infrrastructure and the performance of manufacturing industries: Short-and long-run

Rosina Moreno (), Enrique Lopez-Bazo () and Manuel Artís ()

No 69, Working Papers in Economics from Universitat de Barcelona. Espai de Recerca en Economia

Abstract: We present a theoretical framework for determining the short- and long-run effects of infrastructure. While the short-run effects have been the focus of most previous studies, here we derive long-run elasticities by taking into account the adjustment of quasi-fixed inputs to their optimum levels. By considering the impact of infrastructure on private investment decisions, we observe how, apart from the direct effect on costs in the short-run, infrastructure exerts an indirect source of influence in the long-run through their effect on private capital. The model is applied to manufacturing industries in the Spanish regions.

JEL-codes: H54 O47 (search for similar items in EconPapers)
Date: 2001
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Persistent link: http://EconPapers.repec.org/RePEc:bar:bedcje:200169

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