Network Effects of the Productivity of Infrastructure in Developing Countries
26 Pages Posted: 17 Jan 2006
Date Written: December 2005
Abstract
Using panel data models, the author examines the threshold effects of the productivity of infrastructure investment in developing countries. He considers various specifications of an augmented production function that allow for endogenous thresholds. More precisely, these specifications are tested in a panel threshold regression model. The author's main robust result is the presence of strong threshold effects in the relationship between output and private and public inputs. Whatever the transition mechanism used, the testing procedures lead to strong rejection of the linearity of this relationship. In particular, the productivity of infrastructure investment generally exhibits some network effects. When the available stock of infrastructure is very low, investment in this sector has the same productivity as noninfrastructure investment. On the contrary, when a minimum network is available, the marginal productivity of infrastructure investment is generally largely greater than the productivity of other investment. Finally, when the main network is achieved, its marginal productivity becomes similar to the productivity of other investment.
Keywords: Infrastructure, Threshold Panel Regression Models
JEL Classification: C82, E22, E62
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Effects of Infrastructure Development on Growth and Income Distribution
By César A. Calderón and Luis Servén
-
Investing in Infrastructure: What is Needed from 2000 to 2010?
By Marianne Fay and Tito Yepes
-
Infrastructure in Latin America
By César Calderón and Luis Servén
-
Trends in Infrastructure in Latin America, 1980-2001
By César A. Calderón and Luis Servén
-
The Social Rate of Return on Infrastructure Investments
By David Canning and Esra Bennathan
-
By Esther Duflo and Rohini Pande