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PRODUCTIVITY EFFECTS OF PUBLIC CAPITAL MAINTENANCE: EVIDENCE FROM U.S. STATES
Author(s) -
Kalyvitis Sarantis,
Vella Eugenia
Publication year - 2015
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12136
Subject(s) - spillover effect , productivity , economics , capital (architecture) , capital expenditure , state (computer science) , monetary economics , econometrics , macroeconomics , finance , archaeology , algorithm , computer science , history
This article assesses the productivity effects of infrastructure operation and maintenance (O&M) spending by state and local governments in the 48 contiguous U.S. states over the period 1978–2000. We explicitly account for transboundary spillovers of capital and O&M spending and follow a semiparametric methodology that allows us to estimate state‐specific output elasticities. We find strong evidence that in all 48 states the cross‐state spillover effects of O&M outlays on productivity exceed their within‐state impacts and are substantially higher than the spillover effects of capital expenditure. ( JEL C14 , E22 , E62 , H76 , O11 , O47 , R11 )