The Structural and Productivity Effects of Infrastructure Provision in Developed and Developing Countries

Luis Orea*, Inmaculada C. Álvarez, Luis Servén

*Corresponding author for this work

Research output: Working paperResearchpeer-review

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Abstract

In this paper, we provide an empirical assessment of the effects of infrastructure provision on structural change and aggregate productivity using industry-level data for a set of developed and developing countries over 1995-2010. A distinctive feature of our empirical strategy is that it allows the measurement of the resource reallocation directly attributable to infrastructure provision. To achieve this, we propose a two-level top-down decomposition of aggregate productivity that combines and extends several strands of the literature. In our empirical application, we find significant production losses attributable to misallocation of inputs across firms, especially among African countries. Our empirical application also shows that infrastructure provision has stimulated aggregate TFP growth through both within and between-industry productivity gains
Original languageEnglish
PublisherCopenhagen Business School [wp]
Number of pages37
Publication statusPublished - 2022
Externally publishedYes
SeriesCSEI Working Paper
Number2022-03
SeriesWorking Paper / Department of Economics. Copenhagen Business School
Number06-2022

Keywords

  • Productivity growth
  • Resource allocation
  • Stochastic frontier analysis
  • Structural change

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