Productivity effects of public capital maintenance : evidence from U.S. states
Title: Productivity effects of public capital maintenance : evidence from U.S. states
Citation: Economic inquiry, 2015, Vol. 53, No. 1, pp. 72–90
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.
Published online: 26 August 2014
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