On the regional incidence of highway investments in the USA

The objective of this paper was to investigate the regional incidence of the aggregate effects of investment in highways in the US taking into consideration the presence of regional spillovers. The empirical results are based on VAR estimates at both the aggregate and state levels using output, employment, and investment, as well as different measures of highway investments. Empirical results allow us to establish several stylized facts. First, investment in highways affects private sector variables positively at the aggregate level as well as in most states. Second, the regional spillover effects are very significant for all private sector variables. Third, these spillovers have a clear geographical pattern in that they tend to be more important in western states and the corridor between the Great Lakes and the Gulf Coast.     

The role of investment and regulatory reforms in the development of infrastructure across transition economies

The main aim of this paper is to assess whether investment in infrastructure and broader institutional infrastructure reforms have been reflected in better infrastructure service provision across transition economies. Our econometric analysis corroborated by case studies evidence shows that at the enterprise level the reduction of utility arrears is significantly associated to lower costs in terms of interruption of power and telecom service provision. This suggests that the discipline exercised by private sector involvement is starting to have some impact. At the country level, our regression results show that increased investment, tariff increases and the establishment of an independent regulator are all significantly associated to the reduction of power and telecom outages.     

Interstate spillovers of private capital and public spending

The analysis estimates the economic returns on public spending by transportation and non-transportation functions vs. private capital, using a panel data set for 48 contiguous states from 1989 through 2002. These actual spending dollars are used as a more precise measure compared to apportioned state public capitals used in the existing literature. For each type of capital/spending, the interstate spillovers were constructed in such a way that different states are weighted by commodity flows across the states to reflect different degree of inter-state dependence. We find that when spending data rather than capital stock is used, all of the interstate spillover effects are negative and statistically significant, suggesting that infrastructure investment does not contribute to economic growth (at least not directly). Therefore, crowding out effects exist among states competing for both private and government funds, in particular if states are highly dependent on allocation of federal funds. These results confirm the finding that previously estimated positive coefficients reflect spurious correlation based on capital stocks and output.     

Gentrification in new-build and old-build transit-oriented developments: the case of Bengaluru

Indian cities have seen substantial investment in building metro systems, with a few cities operating full-fledged metro. In the case of city of Bengaluru, the influx of public investment on transit and favourable zoning incentives are attracting around 26% of housing investment in transit-oriented developments (TODs). This paper examines whether such a large-scale influx of public and private capital is leading to gentrification in TODs. The findings indicate that the new housing projects in TODs are causing new-build gentrification, but the old build existing housing remains ungentrified. Towards mitigating gentrification issues, the paper recommends inclusive and equitable TOD strategies.     

Incorporating demand-side aspects into regional policy: variations in the importance of private investment decision factors across regions

Most regional programs focus on the supply side of regions, emphasizing the attraction conditions offered, such as infrastructure, labor skills, tax incentives, etc. This study analyzes one aspect of the demand side, that is, how investment decisions of private firms are made by asking the question: “Do corporations decide the same way on investments in different parts of the territory?” The paper analyzes the investments of 373 large Brazilian firms during 1996–2004. Based on the investment decisions of these firms, the role of sales, cash-flow, external financing, and working capital is investigated through regression analysis. The regional influence is captured by explanatory variables representing regional and firm characteristics, and by interaction dummies between the region and the main investment determinants. The results indicate significant differences across regions in the importance of investment determinants. This information is important for regional development policy, because different mechanisms should be used in different regions to foster private investments.     

Infrastructure and regional growth,growth dynamics and policy relevance for India

The role of infrastructure in economic growth has been the subject of considerable research in the fields of public policy, economics, and planning. In this paper, I examine the contribution of publicly supplied infrastructure to sub national regional growth in India. I first develop and numerically examine a regionally disaggregated model of economic growth to understand the dynamics of private capital and public infrastructure. For the empirical analysis, I use a pooled data set for Indian states to examine if publicly supplied infrastructure is a significant determinant of regional growth and whether there are spatial variations in the productivity effects of infrastructure. The main findings are that transport and communications infrastructure expenditures are significant determinants of regional growth, and the positive benefits accruing from these expenditures come not only from investments made by individual states, but there are positive externalities from network expenditures made by neighboring states. Finally, the out of sample simulated regional growth predictions show divergence in private capital formation between lagging and leading states. The findings, interpretations, and conclusions are entirely those of the authors, and do not necessarily represent the views of the World Bank, its executive directors, or the countries they represent.     

The option value of government guarantees in infrastructure projects

The participation of private capital in public infrastructure investment projects has been sought by many governments who perceive this as a way to overcome budgetary constraints and foster economic growth. For some types of projects, this investment may require government participation in the form of project guarantees in order to reduce the risk to the private investor, and as a consequence, the government assumes a contingent liability which may have significant future budgetary impacts. We present a minimum traffic guarantee (MTG) real options model that differs from most of the literature in the field by using market data to determine stochastic project parameters. This model can be used to assess the value of these guarantees, allows the government to analyse the cost–benefit of each level of support, and proposes an alternative to limit the exposure of the government while still maintaining the benefits to the private investor. We apply this model to the projected 1000 mile long BR‐163 toll road that will link the Brazilian Midwest to the Amazon River. We conclude that the use of public–private partnerships (PPP) with guarantees and caps on total government outlays can be modelled effectively using option pricing methods and can be a solution to attract private investment to high risk public infrastructure projects.     

FDI and immigration: a regional analysis

Does immigration affect foreign direct investment? Existing studies on immigration and FDI have all looked at aggregate flows at the national level, arguing that immigrant networks lower the risk of foreign investment through increased information flows and a built in market. However, these national-level studies suffer from identification problems since many of the factors that attract immigrants also attract FDI. This study improves upon identification by looking at the regional distribution of both FDI and immigration from 10 source countries to the 50 US states. Using a unique measure of immigrant network size in each state, I find that immigration is not only positively correlated with FDI, it tends to lead it as well. Comparing a state with an average sized immigrant network to one with a network twice as large, I estimate that the stronger network state will get on average 20 more foreign-owned affiliates opening per year, an effect that is quite persistent over time. On average, more skilled immigrant communities attract more FDI, while the pull effect of immigration on FDI also increases with immigrant ties to native countries and with immigrant influence in local communities. These results suggest that immigration creates a positive externality in foreign investment that must be considered when assessing the costs and benefits of labor mobility.     

基于公平偏好的公共文化 PPP 项目政府补偿研究

鉴于公共文化 PPP 项目收益性弱、对私人部门吸引力不足的特点,将私人部门公平偏好引入公共文化 PPP 项目的政府补偿机制设计,构建了以政府为主导的两阶段公私 Stackelberg 博弈模型。 以柳州某文化广场 PPP 项目为例分析了私人部门公平偏好对其初始投资决策、最优投资决策及政府补偿的影响。结果表明:博弈的第一阶段中政府初步许诺的运营期补偿力度较小,私人部门公平偏好与其初始决策投资呈正比;第二阶段确定补偿力度时,政府承诺收入率与私人部门期望收入率之差超过其参照点时,若私人部门公平偏好越高,要求政府最优运营期补偿力度越大,项目最优投资规模亦越大。研究结果可为公共文化 PPP 项目的补偿设计提供理论依据。     

Evolutionary game of investors’ opportunistic behaviour during the operational period in PPP projects

In public–private partnership (PPP) projects, during the operational period, private investors are prone to act opportunistically in pursuit of their own gain. Based on the perspectives of government’s administrative supervisory functions, this paper analyses the issue of strategic choice for opportunistic behaviour by the government and private investors during the operational period of projects using evolutionary game theory. The results show that there is not a single set of evolutionarily stable strategies (ESS) between the government and the investors. The end results of the evolutionary game are related to the initial states of the system. Conditions that would dissuade investors from adopting an opportunistic behaviour, and settings that would encourage government to supervise closely, are explored. Punishments set by the government, which would then lead to different ultimate choices made by these two parties, are also discussed. Finally, the paper proposes a few policy recommendations for government supervision on the basis of parametric analysis. The findings also serve as a reference for the decision-making process of the government and the investors.     

Urbanization and economic growth in Punjab (India): an empirical analysis

When several cross-country and country level studies investigate the relevant determinates of urbanization and its impact on economic growth, the present paper focuses on micro level analysis by considering Indian states of Punjab. The empirical results show that urban population in Punjab is concentrated in and around Class I cities as in India. The distance to the nearest railway station from a city, city-wise rainfall have a negative effect while basic infrastructural facilities (i.e., number of schools, latrines, hospital, water availability) have a positive impact on urbanization. Finally, it finds a positive link between urbanization and economic growth in Punjab.     

The moderating role of governance environment on the relationship between risk allocation and private investment in PPP markets: Evidence from developing countries

PPPs have become a popular way to supply infrastructure around the world. However, compared with developed countries, most developing countries have failed to attract private investment over the past years. Risk allocation and governance environment (e.g., the extent of public participation, the level of political stability, the quality of public services, the ability of regulations, abiding the law, and the extent of corruption) may be important factors. To test the hypotheses, using about 4560 PPP projects in 138 developing countries from 2002 to 2015, this paper applies the Tobit regression model to investigate the interaction effect of governance environment and risk assumed by private partners on private investment. Results indicate that private partners assume that less risk can attract more private investment, and that a higher level of governance (control of corruption, government effectiveness, regulatory quality, and rule of law) reduces the negative influence of risk assumed by private partners on private investments.     

What sustains larger firms? Evidence from Chinese manufacturing industries

This study investigates what sustains large firms in China and identifies the determinants of firm sustaining. With the understanding of the triple process of economic transition, this study explores the influence of global–local interaction and regional factors on business sustaining. Based on the Annual Survey of Industrial Firms in China during 1998–2005, this paper employs the Cox proportional hazard model to confirm that global, provincial and local forces are critical for the sustaining of large firms. Particularly, the presence of foreign firms shows strong competition effect at the prefecture city level but no spillover effect at the provincial level. Provincial market-oriented institutions and market potential however are crucial to sustain businesses in China. Non-state-owned enterprises such as private and foreign firms are more dependent on market-oriented institutions than state own enterprises. Firms which are able to reap from agglomeration economies and local governmental supports are more likely to sustain. In addition, local factors show different impacts on business sustaining in different regions. The findings indicate that both market and state can play a substantial role in sustaining businesses in transitional economies.     

Customary Land Reform to Facilitate Private Investment in Zambia: Achievements, Potential and Limitations

In the name of development, governments in Africa are reformulating land policies to facilitate privatisation of customary land rights. The main rationale for this is to stimulate private investment through tradable land titles, which will enhance local economic activity and ultimately contribute to increased incomes and poverty alleviation. However, these land reform proposals have often produced unintended results leading to exclusion of the poor and servicing the interests of the elite. Zambia is not an exception in the land reform rhetoric. In 1995, the government enacted a pro-investment law to attract investment from abroad. Consequently, large tracts of customary land were converted to private tenure as increasing foreign investments were made in the country. One example of such investments is mining; for example, Lumwana and Kansanshi mines were opened up in Solwezi. These mines have attracted more people and fringe investments in search of economic opportunities. This has further led to increased pressure on land as more people and organisations seek to acquire customary land from chiefs and convert it to private leaseholds. This paper uses personal experience and research to present the achievements, potential and limitations of private investments in local communities and their economy. The paper argues that, despite the huge potential of private investment, attaining poverty alleviation through land reform strategies in Zambia still remains overshadowed by conflicting agendas, i.e. serving the interests of poor citizens versus pursuing the collective global market agenda in order to gain international recognition and acceptance. This is particularly crucial given that these agendas are often at odds with each other.     

From the Raj to Independence: British investment in the Indian electricity sector

During the colonial times, electricity in India developed for a significant part thanks to British investment. Its growth remained modest and mainly linked to industrial needs, public lighting and common transportation. World War II stimulated industrial production and, consequently, the demand for electricity. The immediate years following the war were even more promising since the preparations for national Independence included a major restructuring of electricity generation and distribution. The 1948 Law on electricity and the first 5-year plans which began in 1951 set the framework for a major development. Instead of nationalization, India chose a policy which allowed for the participation of both private and public enterprises. British and Indian private investment responded positively to the change. At the beginning of the 1950s, the British presence was felt in the power industry. However, a decade later, it was already diminishing. This paper explains the nature of the policy which allowed a partnership between private and public sectors, the reasons why the latter finally prevailed over the former and the consequences on British investment.     

外商直接投资与我国房地产业发展的关系研究

首先分析了外商直接投资在房地产业中的特点,然后对我国外商直接投资额和房地产竣工建筑面积的发展状况进行了描述性分析,并运用Granger因果检验对1985~2010年的外商直接投资和房地产竣工建筑面积两个时间序列进行因果分析,结果显示,外商直接投资对房地产的发展具有较强的促进作用,但房地产发展对外商直接投资的促进作用却并不明显。     

Housing crisis: the Platform of Mortgage Victims (PAH) movement in Barcelona and innovations in governance

This paper analysed the aftermath of the bursting of the housing bubble in Spain, which has left thousands of families without homes and indebted for life. In the first of two parts, we look at contextually specific interactions between state regulation and market-oriented projects in Spain. This country is a salient case in which an economic recession and a debt crisis follow upon a long period of growth characterized by a housing bubble and a particular urban growth model. In this part, we argue that the central government has played a key role in framing fiscal incentives for housing ownership, and local and regional administrations have engaged in short-term forms of inter-spatial competition for public and private resources, place marketing and regulatory under-cutting in order to attract investment. In the second part, the paper examined the urban social movement “Platform of Mortgage Victims” that, after starting in Barcelona, has spread to many other cities. The movement has created innovative strategies for housing accessibility and public and private governance in the housing market. These strategies include innovations at the local level and at national and European institutional levels. In this part, we argue that social movements like the one we study are socially innovative when they aim at responding to social needs not met by the market and the state institutions. At the same time with their activism, they transform the debate in the public sphere while prompting institutions to introduce new governance mechanisms and policy outcomes.     

A prerequisite for meaningful state economic performance comparisons: Adjusting for population density

This paper examines labor productivity across the lower 48 states from 1993 to 2000, a period that coincides considerably with the longest economic expansion, as chronicled by the National Bureau of Economic Research to date. Our results suggest that states with high education levels, high population density, and low tax burden tend to have high labor productivity. Further analysis shows that differences in population density account for the largest share of the differences in labor productivity across states. Since population density is not generally considered a policy variable for most states, more meaningful state economic performance comparisons can be made by taking into consideration differences in state population densities. These findings should be of interest to economic development organizations and policy makers because labor productivity is the primary source of wages in the long run. Both co-authors are Senior Research Associates in the University of Southern Maine's Center for Business and Economic Research, Maine’s EDA University Center serving the public and private sectors. Received: May 2003/Accepted: April 2004     

Transfers,Contracts and Regulation: A New Institutional Economics Perspective on the Changing Provision of Social Housing in Britain

Social housing policy in the UK mirrors wider processes associated with shifts in broad welfare regimes. Social housing has moved from dominance by state housing provision to the funding of new investment through voluntary sector housing associations to what is now a greater focus on the regulation and private financing of these not-for-profit bodies. If these trends run their course, we are likely to see a range of not-for-profit bodies providing non-market housing in a highly regulated quasi-market. This paper examines these issues through the lens of new institutional economics, which it is believed can provide important insights into the fundamental contractual and regulatory relationships that are coming to dominate social housing from the perspective of the key actors in the sector (not-for-profit housing organisations, their tenants, private lenders and the regulatory state). The paper draws on evidence recently collected from a study evaluating more than 100 stock transfer organisations that inherited ex-public housing in Scotland, including 12 detailed case studies. The paper concludes that social housing stakeholders need to be aware of the risks (and their management) faced across the sector and that the state needs to have clear objectives for social housing and coherent policy instruments to achieve those ends.     

Okun’s law and urban spillovers in US unemployment

Using data for 2002–2010 from 358 Metropolitan Statistical Areas (MSA), we estimate Okun’s law which accounts for national shocks and spatial spillovers in urban areas. Our scale of measurement is changed to the state level, allowing us to capture a different source of spatial dependence on unemployment. Our main finding is that MSA-specific growth has a small effect on MSA unemployment rate, implying that in a well-integrated labor market like the USA, unemployment at an urban level is highly dependent on neighboring and national labor market conditions. Our results also show that the driving forces behind the behavior of unemployment for MSAs are different than those for states.