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The Structural and Productivity Effects of Infrastructure Provision in Developed and Developing Countries

Author

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  • Orea, Luis
  • Álvarez, Inmaculada C.
  • Servén, Luis
Abstract
In this paper, we provide an empirical assessment of the effects of infrastructure provision on structural change and aggregate productivity using industry-level data for a set of developed and developing countries over 1995-2010. A distinctive feature of our empirical strategy is that it allows the measurement of the resource reallocation directly attributable to infrastructure provision. To achieve this, we propose a two-level top-down decomposition of aggregate productivity that combines and extends several strands of the literature. In our empirical application, we find significant production losses attributable to misallocation of inputs across firms, especially among African countries. Our empirical application also shows that infrastructure provision has stimulated aggregate TFP growth through both within and between-industry productivity gains.

Suggested Citation

  • Orea, Luis & Álvarez, Inmaculada C. & Servén, Luis, 2022. "The Structural and Productivity Effects of Infrastructure Provision in Developed and Developing Countries," Efficiency Series Papers 2022/01, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    • Handle: RePEc:oeg:wpaper:2022/01
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    More about this item

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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