An Analysis of the Impact of Public Infrastructure on Productivity Performance of Mexican Industry

33 Pages Posted: 2 Oct 2007

Date Written: September 2007

Abstract

It has been frequently quoted in the literature that one decisive cause of the productive performance of an economy might be infrastructure investment. This paper provides a dual profit theoretical framework of measuring the effects of infrastructure on economic performance in terms of gains in profits, cost savings, as well as in terms of productivity growth enhancement. In an empirical application, we opt for Mexican industry data. The results show that returns to infrastructure capital are significant and positive, though some variability across time exists. Moreover, the decomposition of total factor productivity growth reveals that the economic performance could be enhanced by investing in infrastructure capital.

Keywords: profit function, productivity growth, public infrastructure, Mexican manufacturing

JEL Classification: D21, D24, H54, E62

Suggested Citation

Mamatzakis, Emmanuel C. Manolis, An Analysis of the Impact of Public Infrastructure on Productivity Performance of Mexican Industry (September 2007). CESifo Working Paper No. 2099. Available at SSRN: https://ssrn.com/abstract=1018340

Emmanuel C. Manolis Mamatzakis (Contact Author)

University of Macedonia ( email )

Thessaloniki, 54006
Greece

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