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

Fingleton, Bernard and Gómez-Antonio, Miguel (2009) Analysing the impact of public capital stock using the NEG wage equation: a panel data approach. SERC Discussion Papers, SERCDP0024. Spatial Economics Research Centre (SERC), London School of Economics and Political Science, London, UK.

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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.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.spatialeconomics.ac.uk/SERC/publication...
Additional Information: © 2009 Bernard Fingleton and Miguel Gómez-Antonio,
Library of Congress subject classification: H Social Sciences > HA Statistics
H Social Sciences > HC Economic History and Conditions
Sets: Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: SERCDP0024
Date Deposited: 24 Mar 2011 10:44
URL: http://eprints.lse.ac.uk/33241/

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