The effects of public infrastructure on the cost structure of Spanish industries

C. Alicia Avilés Zugasti (), Rosario Gómez García () and José Sánchez Maldonado ()
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C. Alicia Avilés Zugasti: Dpto. Teoría e Historia Económica, Facultad de Ciencias Económicas y Empresariales, Universidad de Málaga, 29013 Málaga, Spain Dpto. Economía Aplicada , Universidad de Málaga, 29013 Málaga, Spain
Rosario Gómez García: Dpto. Teoría e Historia Económica, Facultad de Ciencias Económicas y Empresariales, Universidad de Málaga, 29013 Málaga, Spain Dpto. Economía Aplicada , Universidad de Málaga, 29013 Málaga, Spain

Spanish Economic Review, 2001, vol. 3, issue 2, 131-150

Abstract: This paper examines the impact of public infrastructures on the performance of Spanish private business at a disaggregated industry level. We use duality theory to recover the productivity effects of public capital by calculating the cost saving effects that are associated to public services. Using a translog cost function we present panel estimates for 14 Spanish industries during the period 1980-1991. Our results strongly suggest that public capital formation can be considered to be an instrument to improve competitiveness by reducing production costs. However, the results also indicate that there is a technologically induced labor saving effect through higher public investment. Furthermore, our estimates suggest that a distinction among industries is of importance because the effects of public infrastructures vary across industries considerably.

Keywords: Duality theory; public infrastructures; translog cost function; input demands (search for similar items in EconPapers)
JEL-codes: C33 D21 H41 H54 (search for similar items in EconPapers)
Date: 2001-06-18
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Citations: View citations in EconPapers (10)

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