Revisiting the returns of public infrastructure in Mexico:a limited information local likelihood estimation

Mamatzakis, E. and Tsionas, M. (2018) Revisiting the returns of public infrastructure in Mexico:a limited information local likelihood estimation. Economic Modelling, 75. pp. 132-141. ISSN 0264-9993

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This paper revisits the issue of accurately decomposing productivity growth to the impact of public infrastructure at firm level for Mexican industry whether the underlying functional form is a profit or a cost function. Our framework decomposes productivity growth into different components, and in particular the contribution of public infrastructure. We also propose a novel limited information local likelihood (LILL) estimation method that adequately deals with the issue of the endogeneity and model misspecification. The reported evidence shows that public infrastructure enhances productivity growth through profit gains and cost savings in all ten two-digit Mexican industries, though some variability across time exists, notably in the nineties and the 2000s when a shortage of infrastructure is observed.

Item Type:
Journal Article
Journal or Publication Title:
Economic Modelling
Additional Information:
This is the author’s version of a work that was accepted for publication in Economic Modelling. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Economic Modelling, 75, 2018 DOI: 10.1016/j.econmod.2018.06.013
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Deposited On:
24 Aug 2018 12:50
Last Modified:
04 Feb 2023 01:18