IZA DP No. 1019: Public Infrastructure as a Determinant of Intertemporal and Interregional Productive Performance in China
revised version published as 'Public infrastructure as a determinant of productive performance in China' in: Journal of Productivity Analysis, 2011. 36 (1), 91 - 111
This paper focuses on the question whether public infrastructure capital matters for labor productivity in China, both over time and across regions. It finds that public infrastructure is a significant determinant of variations in labor productivity across provinces, but the contribution of public capital to labor productivity growth over time is likely non-existing or even negative. These seemingly contradictory results are reconciled once we view the measured intertemporal effect as a short-run impact and the interregional effect as a longterm consequence of public infrastructure investment.