Social Infrastructure and Productivity of Manufacturing Firms – Evidence from Pakistan

43 Pages Posted: 14 Sep 2018

See all articles by Riaz Ahmed

Riaz Ahmed

Zentrum für Europäische Wirtschaftsforschung (ZEW)

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Date Written: April 20, 2016

Abstract

Does investment in social infrastructure affect the productivity of manufacturing firms in developing countries? To test this question, I empirically investigate the impact of social infrastructure indicators at district level on firm productivity using firm level data from Pakistan. I split my sample into rural and urban regions to capture the effect of regional disparities in investment in social goods while controlling for a potential selection bias from firms‟ decision to locate in regions with better infrastructure equipment. My findings reveal that indicators of health and education are positively and significantly related to firm level productivity in manufacturing industries in Pakistan. However, these results hold for urban districts only. For rural regions, both health and education show a negative impact on firm productivity.

Keywords: Firm Productivity , Social Infrastructure , Health and Education, Pakistan

JEL Classification: D24, H51, H52, I15, I25

Suggested Citation

Ahmed, Riaz, Social Infrastructure and Productivity of Manufacturing Firms – Evidence from Pakistan (April 20, 2016). ZEW - Centre for European Economic Research Discussion Paper No. 38, Available at SSRN: https://ssrn.com/abstract=2774235 or http://dx.doi.org/10.2139/ssrn.2774235

Riaz Ahmed (Contact Author)

Zentrum für Europäische Wirtschaftsforschung (ZEW) ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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