Infrastructure Productivity and Growth: Experiences from Latin America

Gianluca di Natale

Student thesis: Master thesis

Abstract

Infrastructure is an important driver of economic growth. As an input of the production process, it constitutes the backbone of the economic activity enabling the provision of public service, connectivity and inclusion. Moreover, it raises Total Factor Productivity (TFP) by improving efficiency of existing productive inputs. In the case of Latin America, inefficient infrastructure has been identified as a crucial barrier to productivity growth, hence undermining the potential for sustainable economic development. Regional economies have been struggling to bridge the productivity gap with more developed countries. This paper illustrates the evolution of the gap, identifying the root causes of the infrastructure bottleneck in Latin America. The aim of this research is to propose a measurement of infrastructure that may empirically explain the relationship with TFP. Data represent the development of seven infrastructure indicators and TFP between 1980 and 2015. Using a sample of four Latin American countries, evidence shows positive correlation between some infrastructure variables and productivity, even though only limited significance can be attributed to the analysis. The partial success of the model is moderated by extensive analysis of the dimensions affecting the infrastructure progress in the sample countries and that can be associated to the dispersion in productivity experienced in the last decades.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2018
Number of pages75
SupervisorsNiels Mygind