Public Infrastructure, Private Input Demand, and Economic Performance of the Greek Industry

No 406, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: In this paper we examine the effects of the services provided by public infrastructure on the cost structure, private input demands, and productivity performance of twenty two-digit Greek manufacturing industries. The model of the paper is the dual cost function. Although the effects of public infrastructure varies across different industries our results provide evidence in favour of a productive public infrastructure. In addition, public infrastructure is found to be complement to private capital stock and substitute to labour. Specifically, the cost-saving impact of public infrastructure ranges from 0.02 percent in food manufacturing industry to 0.78 percent in wood and cork. Moreover, empirical evidence is provided in favour of the argument that the productivity growth of the majority of the twenty Greek manufacturing industries has been depressed by the observed shortage in public infrastructure in the eighties.

Keywords: Dual cost function; Productivity growth; Infrastructure (search for similar items in EconPapers)
JEL-codes: E62 H54 L60 (search for similar items in EconPapers)
Date: 1999-02-01
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:qmw:qmwecw:406

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