Public Infrastructure and Productivity in U.S. Manufacturing: Evidence from the Price Augmenting AIM Cost Function
نویسندگان
چکیده
In this paper, we take a cost function approach to the investigation of the e¤ects of public infrastructure on the performance of the U.S. manufacturing industry, using KLEMS data over the period from 1953 to 2001. We build on Duggal et al. (1999) and Feng and Serletis (2008) and propose a price augmenting Asymptotically Ideal Model (AIM) model where public infrastructure is incorporated into the cost function as part of the e¢ ciency index rather than as a xed input. In doing so, we specify the growth rate of the e¢ ciency index as a Box-Cox function of public infrastructure and a time trend, a proxy for other technology. The excellent exibility of our price augmenting AIM cost function o¤ers many insights regarding the e¤ects of infrastructure on the U.S. manufacturing sector. JEL classi cation: C30; D24.
منابع مشابه
The Effects of China's Growth in Manufacturing Sector in the U.S. Economy
T his paper investigates the gain of bilateral trade between China and U.S. in manufacturing sectors when both countries play a role in asymmetric (biased) growth of international trade. Our model includes a special case of Biased Growth Theory in international trade. We collected labor productivity, export and import data by using classification of manufacturing industries, for U.S...
متن کاملInternational Capital Movements and Relative Wages: Evidence from U.S. Manufacturing Industries
In this paper, we use a multi-sector specific factors model with international capital mobility to examine the effects of globalization on the skill premium in U.S. manufacturing industries. This model allows us to identify two channels through which globalization affects relative wages: effects of international capital flows transmitted through changes in interest rates, and effects of international...
متن کاملAgglomeration, Productivity and Regional Growth: Production Theory Approaches
Agglomeration Economies, or production cost savings due to geographic clustering of firms and industries, can enhance the growth and development of firms, industries, regions and cities. We provide an overview of the theory and empirical literature of agglomeration, and highlight several applications from the cost function perspective. These applications include cost savings from density in the...
متن کاملImpact of Infrastructure on Productivity: Case of Indian Registered Manufacturing
This study is primarily focused on the productivity impacts of the provision of infrastructure on the registered manufacturing sector in India. This is analyzed by estimating the cost elasticity of infrastructure inputs. For this purpose we postulate a variable cost function model for the manufacturing sector with cost as a function of the prices of the variable inputs, levels of output and inf...
متن کاملThe Effect of Education on Industrial Development (Evidence from Iranian Small Industries)
The literature show evidence that small manufacturing enterprises (SMEs) are understood as main source of technology development and employment creation. At the same time they are vulnerable to a number of restrictions such as access to finances, skilled labor and public support, while are exposed to high competition and suffer from low survival rate. This research aims to shed lights on the ro...
متن کامل