Public capital formation and regional development in Spain

Alfredo Pereira, Oriol Roca Sagales

Research output: Contribution to journalArticleResearchpeer-review

20 Citations (Scopus)

Abstract

This paper uses a vector autoregression (VAR) approach to evaluate the effects of public investment on private sector performance in Spain. Empirical results suggest that public investment positively affected private investment, employment, and output at both aggregate and regional levels. The regions that benefited the most from public investment in the last two decades were Cataluna, Madrid, and Pais Vasco. These regions are among the largest economic areas in the country and among the ones with the highest GDP per capita. Accordingly, public investment, while an important factor for aggregate economic growth, has also been a source of increasing regional asymmetries.
Original languageEnglish
Pages (from-to)281-294
JournalReview of Development Economics
Volume3
Issue number3
DOIs
Publication statusPublished - 1 Jan 1999

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