Public capital and total factor productivity: New evidence from the Italian regions, 1970–98

Destefanis S. and Sena V. (2005) Public capital and total factor productivity: new evidence from the Italian regions, 1970–98, Regional Studies 39 , 603–618. This paper analyses the relationship between industrial total factor productivity and public capital across the 20 Italian administrative regions. It adds upon the existing literature in a number of ways: it analyses a longer period (1970–98); it allows for the role of human capital accumulation; it tests for the existence of a long‐run relationship between total factor productivity and public capital (through previously suggested panel techniques) and for weak exogeneity of public capital; and it assesses the significance of public capital within a non‐parametric set‐up based on the Free Disposal Hull. The results confirm that public capital has a significant impact on the evolution of total factor productivity, particularly in the Southern regions. This impact is mainly ascribed to the core infrastructures (road and airports, harbours, railroads, water and electricity, telecommunications). Also, core infrastructures are weakly exogenous.

Keywords:

• Total factor productivity
• Public capital accumulation
• Long‐run relationship
• Non‐parametric frontiers
• Productivité globale des facteurs de production
• Accumulation du capital public
• Rapport à long terme
• Frontières non‐paramétriques
• Gesamtfaktorenproduktivität
• Ansammlung öffentlichen
• Kapitals
• Langjährige
• Beziehung
• Nicht‐parametrische
• Grenzen
• Productividad total factorial
• Acumulación de capital público
• Relación duradera
• Fronteras no paramétricas
• JEL classifications: O40, R11, R53