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- © Vilnius University, 2002-2014
- © Brno University of Technology, 2002-2014
- © University of Latvia, 2002-2014
Article
PUBLIC INVESTMENT AND ECONOMIC GROWTH IN PORTUGUESE SUB-REGIONS: EMPIRICAL EVIDENCE USING PANEL DATA
Elisa Quirino, Paulo Macas Nunes, Antonio Fernandes de Matos
ABSTRACT. Using panel data this study takes as its subject of analysis 28 sub-regions of mainland Portugal (NUT III), for the period 1995-2002, and tests empirically the possibility of public investment contributing to economic growth. The empirical results show that public investment, in the form of Local Government investment, transfers from the European Union and transfers from Central Government, is relevant in explaining economic growth in sub-regions, helping to diminish existing regional inequality. When dividing into sub-regions with low and high economic growth, we find that transfers from Central Government contribute essentially to increased economic growth in sub-regions with low economic growth, while human capital contributes essentially to increased economic growth in sub-regions with high economic growth.
KEYWORDS: economic growth, public investment, panel data, Sub - Regions.
JEL classification: C33; O21; R53; R58.