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

Abstract

This chapter provides an empirical assessment of the effects of infrastructure provision on structural change and aggregate productivity using industrylevel data for a set of developed and developing countries over 1995–2010. A distinctive feature of the empirical strategy followed is that it allows the measurement of the resource reallocation directly attributable to infrastructure provision. To achieve this, a two-level top-down decomposition of aggregate productivity that combines and extends several strands of the literature is proposed. The empirical application reveals significant production losses attributable to misallocation of inputs across firms, especially among African countries. Also, the results show that infrastructure provision has stimulated aggregate total factor productivity growth through both within and between industry productivity gains.

Citation

Orea, L., Álvarez-Ayuso, I. and Servén, L. (2024), "The Structural and Productivity Effects of Infrastructure Provision in Developed and Developing Countries", Parmeter, C.F., Tsionas, M.G. and Wang, H.-J. (Ed.) Essays in Honor of Subal Kumbhakar (Advances in Econometrics, Vol. 46), Emerald Publishing Limited, Leeds, pp. 265-308. https://doi.org/10.1108/S0731-905320240000046010