Examining the Effect of Macroeconomic, Institutional, and Capital Market Drivers on Infrastructure Investment

João Pedro Gonçalves dos Santos, Vítor Manuel Ferreira Moutinho, Mara Madaleno and Zélia Maria da Silva Serrasqueiro Teixeira

Economic Analysis and Policy, 2025, vol. 86, issue C, 165-190

Abstract: This work aims to identify the key drivers that have propelled infrastructure investment in the European Union. Using econometric analysis of panel data, we investigate the relative importance of macroeconomic, capital market, and institutional factors in determining infrastructure investment. All EU countries were selected (except Malta), and the data used centered on 1997 and 2020. Specifically, we use the Generalized Method of Moments (GMM) command to estimate the parameters in dynamic panel models. The use of the GMM econometric command in this research ensures more accurate and robust results, allowing for handling endogeneity and unobserved heterogeneity problems commonly encountered in panel data analysis. The results indicate that the macroeconomic variables overlap institutional issues and the local capital market's maturity level. Our findings shed light on the factors most relevant in driving infrastructure investment in the European Union and can inform the development of more effective public policies in this area.

Keywords: Infrastructure investment; Panel data; Macroeconomic factors; Capital market; Institutional factors; Public policies; GMM (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0313592625000670
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:86:y:2025:i:c:p:165-190

DOI: 10.1016/j.eap.2025.02.038

Access Statistics for this article

Economic Analysis and Policy is currently edited by Clevo Wilson

More articles in Economic Analysis and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().