An Empirical Study on Public Capital Spillovers from the USA to Canada
Posted: 28 Oct 2009
Date Written: 2001
Abstract
Previous research has studied the effect of public capital on private sector output and productivity, overlooking the impact, or spillover effects, of public capital across countries.In this study, the spillover effect of U.S. public capital on Canadian production is explored.Data are collected from annual 1960-1995 Canadian statistics (Historical Statistics of Canada and Canadian Economic Observer) and U.S. statistics (Survey of Current Business from the Bureau of Economic Analysis).Data are analyzed using an aggregate Cobb-Douglas production function.Results indicate a positive, statistically significant spillover effect from the U.S. to Canada.Future research should focus on the use of alternative approaches to study this effect, as well as considering other factors (e.g., trade, foreign direct investment) in determining spillover size. (AKP)
Keywords: Spillover effects, Private sector, Public capital, Firm productivity
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