The Effects of Public Infrastructure and R&D Capital on the Cost Structure and Performance of U.S. Manufacturing Industries

35 Pages Posted: 7 Jan 2008 Last revised: 17 Aug 2010

See all articles by M. Ishaq Nadiri

M. Ishaq Nadiri

New York University (NYU) - Department of Economics; National Bureau of Economic Research (NBER)

Theofanis P. Mamuneas

University of Cyprus - Department of Economics

Date Written: October 1991

Abstract

In this paper the authors examine the effects of publicly financed infrastructure and R&D capitals on the cost structure and productivity performance of twelve two-digit U.S. manufacturing industries. The results suggest that there are significant productive effects from these two types of capital. Their effects on the cost structure vary across industries and their contributions to growth of labor productivity vary over time as well. Not only is the cost function shifted downward in each industry, generating productivity inducement, but the factor demand in each industry is also affected by the two types of public capitals, suggesting bias effects. The authors also calculate the marginal benefits of these services in each industry and estimate the 'social' rates of return to these capitals for the industries in their sample.

Suggested Citation

Nadiri, M. Ishaq and Mamuneas, Theofanis P., The Effects of Public Infrastructure and R&D Capital on the Cost Structure and Performance of U.S. Manufacturing Industries (October 1991). NBER Working Paper No. w3887. Available at SSRN: https://ssrn.com/abstract=474000

M. Ishaq Nadiri (Contact Author)

New York University (NYU) - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Theofanis P. Mamuneas

University of Cyprus - Department of Economics ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus

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