Fedderke, Johannes W.Bogetić, Željko2012-06-262012-06-262006-08https://hdl.handle.net/10986/9290Empirical explorations of the growth and productivity impacts of infrastructure have been characterized by ambiguous (countervailing signs) results with little robustness. A number of explanations of the contradictory findings have been proposed. These range from the crowd-out of private by public sector investment, non-linearities generating the possibility of infrastructure overprovision, simultaneity between infrastructure provision and growth, and the possibility of multiple (hence indirect) channels of influence between infrastructure and productivity improvements. The authors explore these possibilities using panel data for South Africa over the 1970-2000 period, and a range of 19 infrastructure measures. Using a number of alternative measures of productivity, the prevalence of ambiguous (countervailing signs) results, with little systematic pattern is also shown to hold for their data set in estimations that include the infrastructure measures in simple growth frameworks. The authors demonstrate that controlling for potential endogeneity of infrastructure in estimation robustly eliminates virtually all evidence of ambiguous impacts of infrastructure, due for example to possible overinvestment in infrastructure. Controlling for the possibility of endogeneity in the infrastructure measures renders the impact of infrastructure capital not only positive, but of economically meaningful magnitudes. These findings are invariant between the direct impact of infrastructure on labor productivity, and the indirect impact of infrastructure on total factor productivity.en-USCC BY 3.0 IGOACCOUNTINGAGGREGATE PRODUCTION FUNCTIONAIRAIR TRAVELAIRPORTSAIRWAYSANNUAL GROWTHAVERAGE GROWTHAVERAGE GROWTH RATEBENCHMARKCAPITAL ACCUMULATIONCAPITAL STOCKCOMPETITIVENESSCONGESTIONCONSTANT RATECONSTANT RETURNSCONSTANT RETURNS TO SCALEDATA QUALITYDATA SETDATA SETSDEPENDENT VARIABLEDEVELOPING COUNTRIESDIESELDIFFERENTIAL IMPACTDIMINISHING RETURNSDIMINISHING RETURNS TO SCALEDRIVERSECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC RESEARCHECONOMIC THEORYELASTICITIESELASTICITYELASTICITY OF SUBSTITUTIONELECTRICITYEMPIRICAL EVIDENCEEMPIRICAL FINDINGSEMPIRICAL LITERATUREEMPIRICAL MODELEMPIRICAL RESULTSEMPIRICAL SECTIONEMPIRICAL STUDIESEMPIRICAL SUPPORTEMPIRICAL WORKENDOGENOUS GROWTHENDOGENOUS GROWTH MODELEQUILIBRIUM VALUESEXOGENOUS TECHNOLOGICAL PROGRESSEXPORTSFINANCIAL LIBERALIZATIONFOREIGN DIRECT INVESTMENTGDPGOODS VEHICLESGOVERNMENT EXPENDITUREGROSS FIXED CAPITAL FORMATIONGROWTH ACCOUNTINGGROWTH EQUATIONGROWTH IMPACTGROWTH MODELGROWTH MODELSGROWTH PERFORMANCEGROWTH RATEGROWTH RATESGROWTH THEORYHOUSEHOLD INCOMEHUMAN CAPITALINCOMEINCOME GROUPSINCOME SHAREINCOME TAXINCREASING RETURNSINEFFICIENCYINFRASTRUCTURE CAPITALINFRASTRUCTURE INVESTMENTINFRASTRUCTURE PROVISIONJOURNEYSLABOR FORCELABOR PRODUCTIVITYLATIN AMERICANLEVEL OF TECHNOLOGYLONG-RUN EQUILIBRIUMLONG-TERM GROWTHMARGINAL PRODUCTMARGINAL PRODUCTSMARGINAL UTILITYMAXIMUM LIKELIHOOD ESTIMATIONMEASUREMENT ERRORNEGATIVE COEFFICIENTNEGATIVE IMPACTNEGATIVE SIGNNET EFFECTNET EXPORTSOVERVALUATIONPASSENGER VEHICLESPASSENGERSPATENTSPETROLEUM PRODUCTSPOLICY INTERVENTIONPOLICY RESEARCHPOOR GROWTHPOSITIVE EFFECTPOSITIVE IMPACTPRIVATE SECTORPRODUCT MARKETPRODUCTION COSTSPRODUCTION FUNCTIONPRODUCTIVITYPROPERTY RIGHTSPROVISION OF INFRASTRUCTUREPUBLICPUBLIC CAPITALPUBLIC INFRASTRUCTUREPUBLIC INVESTMENTPUBLIC SECTORPUBLIC SECTOR INVESTMENTQUALITY GROWTHRAILRAIL TRAFFICRAIL TRANSPORTRAILWAYRAILWAY LINERAILWAY LINESRAILWAYSROADROAD TRAFFICROADSROLLING STOCKROUTESANITATIONSCALE EFFECTSSHORT-RUN DYNAMICSSIGNIFICANT IMPACTSUB-SAHARAN AFRICATECHNICAL EFFICIENCYTECHNOLOGICAL CHANGETELECOMMUNICATIONSTFPTOTAL FACTOR PRODUCTIVITYTOTAL FACTOR PRODUCTIVITY GROWTHTRANSPORTTRANSPORT COSTSTRANSPORT EQUIPMENTTRUEURBANIZATIONVALUE ADDEDWorld Bank10.1596/1813-9450-3989