On the economic and budgetary effects of investments in SCUTS: the Portuguese toll-free highways

This paper provides empirical evidence on the economic and budgetary effects of the recent investments in toll-free highways in Portugal, the so-called SCUTS, in an effort to bring some clarity to the current policy debate on these highways. This debate is centered on the issue of the financial sustainability of these highways for the public sector and is derived from the fact that their financing through public–private partnerships and shadow tolls involves regular payments from the public budget to the private firms operating them. In this context, the introduction of tolls has been suggested as a mechanism to alleviate possible budgetary pressures. Our first main conclusion is that investments in SCUTS have positive economic effects in all regions of the country. Furthermore, we find that regional spillovers account for about three-quarters of the total effects of these investments. A paradigmatic case is Lisbon, a region that captures the greatest share of these effects without any investments having actually occurred in the region itself. Our second main conclusion is that investments in SCUTS do not seem to generate problems of financial sustainability for the public budget. We estimate that for all SCUTS, the equilibrium tax rate, i.e., the rate that would balance the tax revenues induced by these highways and the shadow tolls the government has to pay, is lower than the effective tax rate for the economy. As a corollary and from a policy standpoint, our results suggest that the introduction of tolls is questionable from a conceptual perspective due to the magnitude of spillovers and seems to be unnecessary from a financial perspective.     

Growth effects of regional policy in Germany: results from a spatially augmented multiplicative interaction model

Private investment subsidies are a key instrument for regional policy making to foster the economic development in lagging regions. In this paper, we analyze their effect on labor productivity growth for German labor market regions for the period from 1994 to 2006. A spatially augmented multiplicative interaction model based on neoclassical growth theory is used, which allows us to assess the marginal effect of regional policy proxied by overall payments of the main German regional development program on the region’s convergence speed conditional on its initial income position as well as policy-related spillovers from its spatial neighborhood. Our results show a statistically significant positive effect of regional policy on labor productivity growth, which increases, the further away the supported region is from its steady-state income level, and the more grants are provided to its geographical neighborhood. The latter effect highlights the existence of positive spatial spillover effects from regional policy in Germany, which enhance the attractiveness of the whole macro region for private sector investments. The additional growth stimulus provided by a 1 % increase in the region’s funding volume is thereby related to an up to 0.3 % gain in terms of labor productivity growth. For regions with the highest initial gaps to steady-state income in the sample distribution, the regional policy stimulus accounts for almost 8 % of the regions’ productivity growth performance.     

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.     

Private investment in India: regional patterns and determinants

This paper analyses private investment by type for 15 major states over the period from 1993–1994 to 2004–2005. This study is new in investigating the determinants of total private investment and domestic private investment at the state level in the Indian context by using generalized method of moments panel estimator. The results show that there is high variation in private investment across Indian states. The results obtained from the regressions show that private investment in the Indian states is explained by infrastructure, the gross fiscal deficit, market size and labour productivity. This paper contributes to the literature on regional development by empirically establishing the existence of simultaneity between private investment and income at the state level in Indian economy.     

Regional economic convergence: Do policy instruments make a difference?

The relationship between public capital, regional output and private sector productivity has been an issue of considerable interest in the regional development literature. There have however been few studies that develop linkages between these issues and the broader literature on economic convergence. This paper presents an innovative methodology to examine the process of regional economic convergence across U.S. states. We examine the effects of economic variables such as human and public capital in the convergence process, and control for business cycle and region specific effects in the analysis. Further, specification problems arising from spatial dependence are also addressed. Results from the empirical analysis show that the speed of convergence is influenced by region specific characteristics and the availability of trained labor in neighboring regions. Received: November 1998/Accepted: March 2000     

Okun’s law,asymmetries and regional spillovers: evidence from Virginia metropolitan statistical areas and the District of Columbia

The purpose of this paper was to examine the strength of the relationship between unemployment and GDP, to determine the extent to which this relationship has been stable in Virginia metropolitan statistical areas (MSA) during the Great Recession and to examine the importance of regional spillovers in Okun’s law. Our results suggest that regional spillovers are very important in local labor markets and in defining the relationship observed at the national level. The MSA level data further supports asymmetries in Okun’s law. The weaker direct relationship between GDP and unemployment at the local level suggests that while federal fiscal and monetary policies to stimulate aggregate demand during periods of economic recovery may be effective, over time, in reducing the unemployment rate, local economic development policies are not effective in achieving the substantial short-term reduction in unemployment needed during recovery. The strong business cycle effects observed in the state MSA, relative to the U.S., suggests that countercyclical policies are fundamentally important and should be targeted more generally to exploit regional spillovers.     

Geographically and technologically mediated knowledge spillovers between European regions

This paper aims at investigating inter-regional knowledge spillovers across European sub-national regions. The basic questions that we wish to answer may be formulated in the following way: do regional geographical and technological proximities matter for the creation of new knowledge within the European regional landscape? After a review of the related literature, we consider a regional knowledge production function that allows for extra regional innovation-generating inputs. Accounting for regional specific social capability, this knowledge production function is applied to an extended sample of 153 European sub-national regions over the period 1989–1996. Interregional knowledge spillovers are shown to exist between geographically close regions and between regions displaying similar technological profiles. However, technological proximity and geographical proximity coincides to a certain extent. Knowledge spillovers are mainly driven by the private business sector. If knowledge spillovers occur within a given country, the national border turns out to seriously hamper interregional spillovers on the European scale. The author wishes to thank Eckhardt Bode, Henri Capron, Raymond J.G.M. Florax, Charlie Karlsson, Roger Stough and Roger Vickerman for their useful comments and suggestions. An earlier version of this paper was presented at the 41st Annual Meeting of the Western Regional Science Association in February 2002, Monterey, California.     

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.     

Regional policy and spillovers from FDI in the UK

This paper tests one of the fundamental assumptions of regional policy makers over the last 20 years. Western governments, in seeking to attract internationally mobile capital have spent significant sums of public money on subsidies and grants. This is justified on the basis that the social returns to FDI are significantly greater than the private returns, due to productivity or technology spillovers from inward investors to domestic industry. However, this paper generates some estimates of these spillovers for both assisted areas and non-assisted areas in the UK, and questions the size of these social returns, arguing that productivity spillovers do not occur in regions where significant inward investment incentives are available.Thanks are due to Holger Gorg, Sourafel Girma, Jim Love, Max Munday, Nigel Pain, Jim Taylor, Colin Wern and to seminar participants in Cardiff, Aston, Lancaster and London for comments on an earlier version of this paper.Received: June 2001/Accepted: May 2003     

Public surface transportation and regional output: A spatial panel approach

This paper studies regional impact of three mature public surface transportation infrastructures in the Northeast corridor of the US: highway, public railway and public transit. Infrastructure stock is valued in real terms from 1991 to 2009. A spatial panel approach with fixed effects is adopted to test the hypothesis of spillovers by allowing for spatial dependence. The result shows that public surface transportation infrastructure in general does have a significant impact on regional output, most of which is from spillover effect; highways have an overwhelming influence through both local effects and spillover effects. The impacts from public railway and public transit are not significant, but transit does show a positive though small spillover effect.     

Highway infrastructure and state-level employment: A causal spatial analysis

This paper analyses the causal relationship between highway infrastructure and employment within the U.S. We estimate dynamic panel models in a vector autoregressive framework using time-series cross-sectional data on lane miles of roadway capacity and private sector employment for the 48 contiguous states over the period 1984–1997. The issue of spatial dependence is explicitly taken into account by means of a spatial filtering technique. Our analysis reveals evidence of employment growth temporally influenced by annual growth in the provision of major highways within the same state and all other states, as well as the other way around. However, the results show that the existence and direction of these temporal and spatial effects depend on the type of highways and time lags considered.

Resumen

país comercial este artículo analiza la relación causal entre la infraestructura de autopistas y el empleo en los EE.UU. Estimamos modelos dinámico de datos de panel dentro de un marco autorregresivo vectorial utilizando datos transversales de series temporales en de capacidad de carretera en millas de carril y de empleo del sector privado para los 48 estados contiguos durante el periodo 1984–1997. Nuestro análisis revela pruebas de crecimiento del empleo influido temporalmente por el crecimiento anual en la provisión de autopistas principales dentro del mismo estado y el resto de estados, y a la inversa. Sin embargo, los resultados muestran que la existencia y dirección de estos efectos temporales y espaciales dependen del tipo de autopistas y los lapsos de tiempo considerados.

     

Firm financial soundness and knowledge externalities: A comparative regional analysis

This paper investigates the role of the regional context with regard to the influence of human capital and knowledge spillovers on SMEs' financial soundness. Our empirical setting is based on a multilevel analysis of panel data, which allows superior treatment of hierarchical data. The analysis is applied to SMEs belonging to the manufacturing sector and operating in four European countries over the period 2010–2015. We find that a combination of individual and regional-level characteristics explains firm soundness better than individual features alone. Furthermore, we find that a high local educational level and knowledge spillovers improve firm soundness and that their effects vary according to the regional level of knowledge. These results are confirmed by several robustness tests.     

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。     

基于风险分摊的PPP项目投资决策与收益分配研究

以公私合作模式(PPP)进行基础设施建设有利于解决政府建设资金紧张以及政府在公共投资管理上的低效问题.文章首先讨论了公私合作投资双方的投资规模上限,通过模型分析得出合作投资有利于项目总风险的降低.其次,建立了公私合作投资双方的最佳投资比例模型,讨论了PPP合作项目风险的识别以及风险科学分配方法,以建立公平的合作关系,充分调动合作双方的积极性.再次,综合考虑投资和风险因素,使用综合评价方法,给出公私双方的风险分摊系数和收益分配比例,并进行了实例分析以验证该方法的有效性.     

INFRASTRUCTURE PRODUCTIVITY ESTIMATION AND ITS UNDERLYING ECONOMETRIC SPECIFICATIONS: A SENSITIVITY ANALYSIS

ABSTRACT In recent years researchers have considered a variety of regional models relating to infrastructure productivity. These models are often based upon overly simple econometric specifications and are typically formulated as if spatial interactions are absent. In this paper, we try to account for some of these shortcomings. We do this by considering spatial lags of certain independent variables, as well as of the dependent variable. We also consider spatial correlation of the error terms, general patterns of heteroscedasticity and of time series autocorrelation, and systems problems. Our results strongly suggest that regional infrastructure productivity involves spatial spillovers relating to both observable variables and error terms. They also suggest that corresponding coefficient estimates are very sensitive to model specifications.     

The spillover effects of public capital on the Turkish private manufacturing industries in the geographical regions

This paper investigates the spillover effects of public capital formation on the Turkish private manufacturing industry at the regional level over the period 1980–2000. The aggregate effects of public capital cannot be captured entirely from the direct effects of public capital installed in the region itself. Spillovers are also an integral part of the regional impact of public capital installed in the outside of the region. Therefore, we estimate the dynamic effects of public capital using VAR models for the seven regions of Turkey by including capital formation installed outside of the region. The results show that direct effects of public capital are positive in some regions, while indirect effects of public capital are positive in most regions. A previous version of this study was presented at the METU/ERC International Conference in Economics VII, 6–9 September 2003, Ankara, Turkey.     

Spatial knowledge spillovers and university research: Evidence from Austria

This paper provides some evidence on the importance of geographically mediated knowledge spillovers from university research activities to regional knowledge production in high-technology industries in Austria. Spillovers occur because knowledge created by universities has some of the characteristics of public goods, and creates value for firms and other organisations. The paper lies in the research tradition that finds thinking in terms of a production function of knowledge useful and looks for patents as a proxy of the `output' of this process, while university research and corporate R&D investment represent the `input' side. We refine the classical regional knowledge production function by introducing a more explicit measure to capture the pool of relevant spatial academic knowledge spillovers. A spatial econometric approach is used to test for the presence of spatial effects and – when needed – to implement models that include them explicitly. The empirical results confirm the presence of geographically mediated university spillovers that transcend the spatial scale of political districts. They, moreover, demonstrate that such spillovers follow a clear distance decay pattern. Received: June 2001/Accepted: August 2002 An earlier version of this paper was presented at the 17^th Pacific Conference of the Regional Science Association International, Portland, Oregon, USA, June 30–July 4, 2001. The research has been supported by grants from the Jubil?umsfonds of the Austrian National Bank (no. 7994) and the Department of Economic Geography & Geoinformatics. The authors are also grateful to Harry Kelejian and three anonymous referees for valuable comments.     

Endogenous R&D spillover and location choice in a mixed oligopoly

We consider a three-stage game where a public firm and a private firm choose R&D, location, and price, under the assumption that R&D spillovers rely on their locations. We show that, in equilibrium, whether the public firm engages in innovation more aggressively than the private firm depends on the degree of spillovers. Moreover, firms’ equilibrium locations exhibit neither maximal nor minimal differentiation. Finally, privatization could reduce social welfare because it may generate inefficient location and insufficient R&D investment. This suggests that a mixed duopoly could be socially preferable to a private duopoly in the presence of endogenous R&D spillovers.     

The consumption function at the regional level: The case of Hawaii

Conclusions This analysis of the consumption function based on the income and expenditure accounts recently developed for Hawaii underscores the value of using appropriate data fin regional analysis. It shows that consumption functions developed at the national level can be successfully used at the regional level. The importance of the explanatory variables changes when one moves from the national aggregate to the regional components. In particular, the results obtained point out the effect of the region's growth rate and the origin of income on the level as well as the composition of consumption.To the extent that regional variations in these variables exist, national estimates of the coefficients of the consumption function are unreliable substitutes for regional coefficients. Although this warning is familiar to economists engaged in regional input-output studies, it has not been heeded by all those engaged in regional macroeconomics. The results reported, as well as their implications, strongly support the call by some regional economists for the development of regional macroeconomics.