The Measurement of Spatial Productivity Spillovers from Public Capital

Antonio Alvarez, Carlos Arias (carlos.arias@unileon.es) and Luis Orea

No 2004/08, Efficiency Series Papers from University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG)

Abstract: This paper analyzes the properties of a frequently-used test of spatial spillover effects of public capital when using regional panel data. This test compares the estimates of the coefficients of public capital in two different production functions. The benchmark model includes the public capital of each region as an explanatory variable. In the second model the public capital of each region is augmented with public capital in neighbouring regions. Using basic regression algebra, we show that the results of this “pseudo-test” are not necessarily related to the existence of spillover effects.

Keywords: productivity; public capital; spillover effects (search for similar items in EconPapers)
Pages: 14
Date: 2004
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Citations: View citations in EconPapers (2)

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