How Productive is Public Capital? A Meta-Analysis

CESifo Working Paper Series No. 2206

CentER Discussion Paper No. 2008-10

47 Pages Posted: 30 Jan 2008

See all articles by Pedro Bom

Pedro Bom

Tilburg University - Center and Faculty of Economics and Business Administration

Jenny E. Ligthart

Tilburg University - CentER, Department of Economics; University of Groningen - Faculty of Economics and Business; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: January 2008

Abstract

The paper analyzes the contribution of public capital to private output using several meta-analytical techniques. Both fixed and random effects models are estimated by Weighted Least Squares. Sample overlap across studies is explicitly controlled for by employing a 'full' Generalized Least Squares estimator. The weighted average output elasticity of public capital amounts to 0.08 after correcting for publication bias. A substantial part of the heterogeneity across studies is explained by study design parameters, such as econometric specification, estimation technique, empirical model, type of public capital, and level of aggregation of public capital data. The large elasticities of public capital found in the early literature seem to be caused by either unidentified (but present) cointegrating relationships or spurious relationships in national time series.

Keywords: public capital, infrastructure, public investment, meta-analysis, meta-regression analysis, publication bias

JEL Classification: H54

Suggested Citation

Bom, Pedro and Ligthart, Jenny E., How Productive is Public Capital? A Meta-Analysis (January 2008). CESifo Working Paper Series No. 2206; CentER Discussion Paper No. 2008-10. Available at SSRN: https://ssrn.com/abstract=1088651

Pedro Bom

Tilburg University - Center and Faculty of Economics and Business Administration ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Jenny E. Ligthart (Contact Author)

Tilburg University - CentER, Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 8755 (Phone)
+31 13 466 4032 (Fax)

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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