The relationship between regional value-added and public capital in Finland: what do the new panel econometric techniques tell us? |
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Authors: | Pellervo Hämäläinen Tuomas Malinen |
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Institution: | 1.Department of Economics,University of Turku,Turku,Finland;2.Department of Economics and FDPE,University of Helsinki,Helsinki,Finland |
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Abstract: | This article applies recently developed panel estimation techniques to estimate the elasticity of private production with
respect to public capital in a regional framework. We use the widely applied production function approach and regional data
from Finland for the 1975–2004 period. In contrast to many previous studies about the productivity of public capital, we focus
especially on panel estimation techniques, showing that the results from commonly applied fixed effects OLS are probably biased
and sensitive to a change of estimator. To get more reliable results, we use the panel DOLS and panel DSUR estimators. The
results suggest that public capital has had a positive impact on private production. |
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Keywords: | |
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