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An Analysis of the Impact of Public Infrastructure on Productivity Performance of Mexican Industry

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  • Emmanuel C. Mamatzakis

Abstract

It has been frequently quoted in the literature that one decisive cause of the productive performance of an economy might be infrastructure investment. This paper provides a dual profit theoretical framework of measuring the effects of infrastructure on economic performance in terms of gains in profits, cost savings, as well as in terms of productivity growth enhancement. In an empirical application, we opt for Mexican industry data. The results show that returns to infrastructure capital are significant and positive, though some variability across time exists. Moreover, the decomposition of total factor productivity growth reveals that the economic performance could be enhanced by investing in infrastructure capital.

Suggested Citation

  • Emmanuel C. Mamatzakis, 2007. "An Analysis of the Impact of Public Infrastructure on Productivity Performance of Mexican Industry," CESifo Working Paper Series 2099, CESifo.
    • Handle: RePEc:ces:ceswps:_2099
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp2099.pdf
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    References listed on IDEAS

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    13. Jan-Egbert Sturm, 1998. "Public Capital Expenditure in OECD Countries," Books, Edward Elgar Publishing, number 1500.
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    Cited by:

    1. Alfredo Marvão Pereira & Rui Manuel Pereira, 2017. "Infrastructure Investment in Portugal and the Traded/Non-Traded Industry Mix," GEE Papers 0078, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Sep 2017.
    2. Ahmed, Riaz, 2016. "Social infrastructure and productivity of manufacturing firms: Evidence from Pakistan," ZEW Discussion Papers 16-038, ZEW - Leibniz Centre for European Economic Research.

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