Abstract
This chapter presents estimates of the contribution of infrastructure investment to the growth of output and employment in Spain and its regions and analyzes the impact of this factor on the process of regional convergence. These estimates are obtained using a simple supply-side model estimated with a panel of Spanish regional data. The model has two key ingredients. The first one is an aggregate production function that relates regional output to the level of employment and the stocks of productive factors (infrastructure, other non-residential physical capital and the average level of schooling of the adult population). The second one is an employment equation that describes the evolution of this variable as a function of observed changes in factor stocks and in wage levels, allowing for the inertia that arises from the existence of adjustment costs. The remainder of the chapter is divided into five sections. Section 2 briefly describes the evolution of aggregate investment in productive infrastructure and its distribution by region. Section 3 sketches an econometric model of growth that is used in Sects. 4 and 5 to quantify the impact of infrastructure investment on regional and national growth and its contribution to convergence in income per capita. Section 6 concludes this chapter.
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Notes
- 1.
For additional details, see de la Fuente (2003b).
- 2.
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de la Fuente, A. (2009). Infrastructure Investment, Growth, and Regional Convergence in Spain. In: Cuadrado-Roura, J. (eds) Regional Policy, Economic Growth and Convergence. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-02178-7_8
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DOI: https://doi.org/10.1007/978-3-642-02178-7_8
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