Spillover Effects of Public Capital Stock: A Case Study for Ecuador

Zurita, Roberto and Morales-Oñate, Víctor (2023): Spillover Effects of Public Capital Stock: A Case Study for Ecuador.

Abstract

This research examines the spatial spillovers of public capital on gross value added across 216 cantons in continental Ecuador. The investigation is conducted within the framework of Spatial Econometrics, utilizing various model specifications and spatial weight matrices, complemented by a Cobb Douglas-type model that incorporates spatial dependence. The findings highlight a positive spatial impact of the public capital stock, with approximately 30\% of the overall effect attributed to the indirect component. This underscores the importance of considering spatial structure when assessing the effects of capital on gross value added. Consequently, the study extends its exploration to derive column and row effects, aimed at identifying the most influential cantons within the neighborhoods established by the spatial structure.

• Item Type: MPRA Paper
• Language: English
• Keywords: Public Capital, Spatial Effects, Factors of Production, Spatial Econometrics, Developing Countries
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity

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