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Is Infrastructure Capital Productive : A Dynamic Heterogeneous Approach / Cesar Calderon
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Calderon, Cesar
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Banks & Banking Reform.
- Economic Theory & Research.
- Infrastructure.
- Infrastructure Economics.
- Macroeconomics and Economic Growth.
- Panel Cointegration.
- Parameter Heterogeneity.
- Public Sector Economics.
- Transport Economics Policy & Planning.
- Local Subjects:
- Banks & Banking Reform.
- Economic Theory & Research.
- Infrastructure.
- Infrastructure Economics.
- Macroeconomics and Economic Growth.
- Panel Cointegration.
- Parameter Heterogeneity.
- Public Sector Economics.
- Transport Economics Policy & Planning.
- Physical Description:
- 1 online resource (34 pages)
- Other Title:
- Is Infrastructure Capital Productive
- Place of Publication:
- Washington, D.C., The World Bank, 2011
- System Details:
- data file
- Summary:
- This paper offers an empirical evaluation of the output contribution of infrastructure. Drawing from a large data set on infrastructure stocks covering 88 countries and spanning the years 1960-2000, and using a panel time-series approach, the paper estimates a long-run aggregate production function relating GDP to human capital, physical capital, and a synthetic measure of infrastructure given by the first principal component of infrastructure endowments in transport, power, and telecommunications. Tests of the cointegration rank allowing it to vary across countries reveal a common rank with a single cointegrating vector, which is taken to represent the long-run production function. Estimation of its parameters is performed using the pooled mean group estimator, which allows for unrestricted short-run parameter heterogeneity across countries while imposing the (testable) restriction of long-run parameter homogeneity. The long-run elasticity of output with respect to the synthetic infrastructure index ranges between 0.07 and 0.10. The estimates are highly significant, both statistically and economically, and robust to alternative dynamic specifications and infrastructure measures. There is little evidence of long-run parameter heterogeneity across countries, whether heterogeneity is unconditional, or conditional on their level of development, population size, or infrastructure endowments.
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