Productivity Effects of Public Capital Maintenance: Evidence from U.S. States

19 Pages Posted: 21 Nov 2014

See all articles by Sarantis C. Kalyvitis

Sarantis C. Kalyvitis

Athens University of Economics and Business - Department of International and European Economic Studies

Eugenia Vella

Athens University of Economics and Business

Date Written: January 2015

Abstract

This article assesses the productivity effects of infrastructure operation and maintenance (O&M) spending by state and local governments in the 48 contiguous U.S. states over the period 1978–2000. We explicitly account for transboundary spillovers of capital and O&M spending and follow a semiparametric methodology that allows us to estimate state-specific output elasticities. We find strong evidence that in all 48 states the cross-state spillover effects of O&M outlays on productivity exceed their within-state impacts and are substantially higher than the spillover effects of capital expenditure.

JEL Classification: C14, E22, E62, H76, O11, O47, R11

Suggested Citation

Kalyvitis, Sarantis C. and Vella, Eugenia, Productivity Effects of Public Capital Maintenance: Evidence from U.S. States (January 2015). Economic Inquiry, Vol. 53, Issue 1, pp. 72-90, 2015, Available at SSRN: https://ssrn.com/abstract=2528846 or http://dx.doi.org/10.1111/ecin.12136

Sarantis C. Kalyvitis (Contact Author)

Athens University of Economics and Business - Department of International and European Economic Studies ( email )

Patission Str 76
GR-10434 Athens
Greece

Eugenia Vella

Athens University of Economics and Business ( email )

No Address Available

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