The Impact of Public Capital on the Efficiency of Private Manufacturing Industry at the Regional Level

Öz

The public capital installed in a region has an important role in the development of that region, because the studies in this area show us that public capital has an important role on the private sector performance. It is expected that public capital enhances private sector efficiency, and thus the output of that sector. As it is well known regional disparities still exist in Turkey. The research in this area shows that public capital can be used to reduce regional disparities. In this respect the main aim of this study is to investigate the impact of public capital formation on the efficiency of private manufacturing industries in Turkey at NUTS II level. While most of the studies in this area use public capital as a direct input for production, we assume that public capital has an effect on private output by enhancing technical efficiency. For the aim of the study, we employ data envelopment analysis to calculate efficiency scores by using a panel data of 25 regions at the first stage; afterwards we estimate the effects of public capital on private sector efficiency econometrically by using these scores. The results reveal that public capital has positive impact on private sector efficiency both at the regional level and regional level

Anahtar Kelimeler

• Public capital, technical efficiency, data envelopment analysis, Turkish manufacturing industry, regional development

Kaynakça

1. Aschauer, D. (1989a). “Is Public Expenditure Productive?” Journal of Monetary Economics. Vol. 23, 177-200.
2. Aschauer, D. (1989b). “Does Public Capital Crowd out Private Capital?” Journal of Monetary Economics Vol. 24, 171-188.
3. Charnes, A., Cooper, W. and Rhodes, E. (1978). “Measuring the Efficiency of Decision Making Units.” European Journal of Operetional Research. Vol 2, 429-444.
4. Charnes, A., Cooper, W., Lewin, A.Y. and Seiford, L. M. (1995). “Data Envelopment Analysis : Theory. Methodology and Applications. Kluwer.
5. Coelli, T.J. and Rao, D.S.P. and Battese, G.E. (1998). “An Introduction to Efficiency and Productivity Analysis” Kluwer, Boston.
6. Deliktaş, E., Önder, A. Ö., and Karadağ, M. (2009). “The Spillover Effects of Public Capital on The Turkish Private Sector Manufacturing Industries in the Geographical Regions” Annals of Regional Science Vol: 43, No:2, pp.365–378.
7. Fernandez, M., Montuenga-Gomez, V.M. (2003). “The effects of Public Capital on the Growth in Spanish Productivity.” Contemporary Economic Policy. Vol.21, 383-393.
8. Filiztekin, A. (1998) Convergence across Regions and Provinces, Koç