How Do Road Infrastructure Investments Affect the Regional Economy? Evidence from Spain

XREAP2016-09

48 Pages Posted: 19 Dec 2016

See all articles by Adriana Karina Ruiz

Adriana Karina Ruiz

Autonomous University of Barcelona

Anna Matas

Autonomous University of Barcelona

Josep Raymond

Autonomous University of Barcelona

Date Written: December 17, 2016

Abstract

This paper analyses the relationship between road infrastructure improvements and investment in capital assets. Using aggregate data at a provincial level for 1977-2008, an equation for machinery and equipment investment is estimated applying Panel Corrected Standard Errors. The results indicate that the long-term elasticities of investment in relation to market potential, GDP and average years of schooling are 0.90, 0.75 and 0.80, respectively. Additionally, the long run impact of a road infrastructure investment policy is assessed. We find that the elasticities of investment in machinery and equipment, capital stock and GDP in relation to travel time are 1.18, 0.33 and 0.11, respectively.

Keywords: Road Infraestructure, Regional Investment, Market Potential, Travel Time

JEL Classification: R4, R11

Suggested Citation

Ruiz, Adriana Karina and Matas, Anna and Raymond, Josep, How Do Road Infrastructure Investments Affect the Regional Economy? Evidence from Spain (December 17, 2016). XREAP2016-09. Available at SSRN: https://ssrn.com/abstract=2886930 or http://dx.doi.org/10.2139/ssrn.2886930

Adriana Karina Ruiz (Contact Author)

Autonomous University of Barcelona ( email )

Plaça Cívica
Cerdañola del Valles
Barcelona, Barcelona 08193
Spain

Anna Matas

Autonomous University of Barcelona ( email )

Plaça Cívica
Cerdañola del Valles
Barcelona, Barcelona 08193
Spain

Josep Raymond

Autonomous University of Barcelona ( email )

Plaça Cívica
Cerdañola del Valles
Barcelona, Barcelona 08193
Spain

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