Public Investment in Transportation and Communication and Growth:A Dynamic Panel Approach*

Centre for Growth and Business Cycle Research Discussion Paper Series from Economics, The University of Manchester

Abstract: This paper investigates the relationship between public investment in transportation and communication and economic growth using traditional instrumental estimation and a mixed fixed and random coefficient approach in the context of a dynamic panel framework. We find that there is a dynamic effect of public investment in transportation and communication on economic growth and its impact is positive. In comparison with earlier studies, our estimtaed coefficients are somewhat lower. However, for the reverse causal relationship proposed by the investment acceleration hypothesis, we find that there is significant heterogeneity across countries and our empirical study does not support the presence of reverse causality.

Keywords: causality; dynamic panel; public investment in transport and communication; economic growth (search for similar items in EconPapers)
Pages: 25 pages
Date: 2003
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Citations: View citations in EconPapers (3)

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Working Paper: Public Investment in Transportation and Communication and Growth: A Dynamic Panel Approach (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:man:cgbcrp:31

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