EconPapers    
Economics at your fingertips  
 

Infrastructure spillovers and strategic interaction: does the size matter?

Massimiliano Ferraresi (), Umberto Galmarini () and Leonzio Rizzo ()
Additional contact information
Umberto Galmarini: Università dell’Insubria
Leonzio Rizzo: University of Ferrara

International Tax and Public Finance, 2018, vol. 25, issue 1, 240-272

Abstract: Abstract We set up a model in which the residents of two neighboring municipalities use the services provided by public infrastructures located in both jurisdictions. The outcome is that municipalities strategically interact when investing in infrastructures, with the small municipality reacting more to the expenditure of its neighbor than the big one. This theoretical prediction is tested by estimating the determinants of the stock of public infrastructures of the municipalities belonging to the Autonomous Province of Trento in Italy. By introducing the classical spatial lag-error component, we find that municipalities positively react to an increase in infrastructures by their neighbors, but the effect vanishes above a given population threshold. Such a result is confirmed when we exploit the exogenous variation in the neighbors’ stock of infrastructures induced by a strong flood that occurred in the Province of Trento in 2000.

Keywords: Local public goods spillovers; Spatial interactions; Size of local jurisdictions; Natural disaster; Internal instruments; External instruments (search for similar items in EconPapers)
JEL-codes: D72 H61 H77 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10797-017-9449-0 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:itaxpf:v:25:y:2018:i:1:d:10.1007_s10797-017-9449-0

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2

Access Statistics for this article

International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf

More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-11-08
Handle: RePEc:kap:itaxpf:v:25:y:2018:i:1:d:10.1007_s10797-017-9449-0