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No. 130. REGIONAL SPECIALIZATION AND PUBLIC INFASTRACTURE INVESTMENTS: EMPIRICAK EVIDENCE FROM GREECE

Published in DISCUSSION PAPERS

T. Tsekeris, K.Vogiatzoglou. 2013.

 

This paper aims to disentangle the effects of various types of public infrastructure investments on the regional specialization of broad sectors of economic activity. The dataset originates from the Monitoring Information System of the Greek government concerning all public investment projects funded by the European Commission and national resources at the prefecture level during 2000-2008. A system-wide model of panel regression equations is employed so that to recognize the significance of spatially fixed effects and that the determinants of specialization vary with each specific sector. The role of market access on specialization is found to be conflicting with that of regional public investments, especially with regard to road expenditure. In particular, the reduction of specialization of manufacturing is associated with improved market access. However, increased regional investment shares on roads, airports and seaports are related to higher specialization of manufacturing. Last, reduced specialization of non-financial services is associated with more regional public investments in roads, but it is inversely related to more regional public investments in ICT and R&D, as well as higher market access.

 

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