Analysing the impact of public capital stock using the NEG wage equation: a panel data approach

Bernard Fingleton () and Miguel Gómez-Antonio

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper examines the relationship between the level of public infrastructure and the level of productivity using panel data for the Spanish provinces over the period 1984-2004, a period which is particularly relevant due to the substantial changes occurring in the Spanish economy at that time. The underlying model used for the data analysis is based on the wage equation, which is one of a handful of simultaneous equations which when satisfied correspond to the short-run equilibrium of New Economic Geography theory. This is estimated using a spatial panel model with fixed time and province effects, so that unmodelled space and time constant sources of heterogeneity are eliminated. The model assumes that productivity depends on the level of educational attainment and the public capital stock endowment of each province. The results show that although changes in productivity are positively associated with changes in public investment within the same province, there is a negative relationship between productivity changes and changes in public investment in other regions.

JEL-codes: C1 N0 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2009-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://eprints.lse.ac.uk/33241/ Open access version. (application/pdf)

Related works:
Working Paper: Analysing the Impact of Public Capital Stock Using the NEG Wage Equation: A Panel Data Approach (2009)
Working Paper: Analysing the impact of public capital stock using the NEG wage equation: a panel data approach (2009)
Working Paper: Analysing the impact of public capital stock using the NEG wage equation: a panel data approach (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:33241

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