Network Effects and Infrastructure Productivity in Developing Countries

Bertrand Candelon, Gilbert Colletaz and Christophe Hurlin
Additional contact information
Gilbert Colletaz: LEO, University of Orléans, France

No 08/2013, NCID Working Papers from Navarra Center for International Development, University of Navarra

Abstract: This paper proposes to investigate the threshold effects of the productivity of infrastructure investment in developing countries within a panel data framework. Various specifications of an augmented production function that allow for endogenous thresholds are considered. The overwhelming outcome is the presence of strong threshold effects in the relationship between output and private and public inputs. Whatever the transition mechanism used, the testing procedures lead to strong rejection of the linearity of this relationship. In particular, the productivity of infrastructure investment generally exhibits some network effects. When the available stock of infrastructure is very low, investment in this sector has the same productivity as non-infrastructure investment. On the contrary, when a minimum network is available, the marginal productivity of infrastructure investment is generally largely greater than the productivity of other investments. Finally, when the main network is achieved, its marginal productivity becomes similar to the productivity of other investment.

Keywords: Infrastructure; Threshold Panel Regression Models (search for similar items in EconPapers)
JEL-codes: C82 E22 E62 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2013-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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http://ncid.unav.edu/download/file/fid/280 (application/pdf)
http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0084.2012.00722.x/full Link to published text

Related works:
Journal Article: Network Effects and Infrastructure Productivity in Developing Countries (2013)
Working Paper: Network effects and infrastructure productivity in developing countries (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:nva:unnvaa:wp08-2013

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