Efficiency of Regional Public Investment: An NPV-Based Spatial Econometric Approach. Issue 4 (1st October 2016)

• Record Type: Journal Article
• Authors: Kopczewska, Katarzyna
• Is Part Of: Spatial economic analysis. Volume 11:Issue 4(2016)
• Page Start: 413
• Page End: 431
• Publication Date: 2016-10-01
• Subjects: Regional public investment -- spatial econometrics -- marginal investment-revenue multiplier -- saturation of economy -- spatial externalities; C21 -- C23 -- R12 -- R58; Space in economics -- Periodicals; Economic geography -- Periodicals; Space in economics -- Econometric models -- Periodicals; Urbanization -- Periodicals; Espace (Économie politique) -- Périodiques; Économétrie -- Périodiques; Géographie économique -- Périodiques; Économie industrielle -- Périodiques; Économie du travail -- Périodiques; Économie urbaine -- Périodiques; Politique économique -- Périodiques; Relations économiques internationales -- Périodiques; 330.9
• DOI: 10.1080/17421772.2016.1217346
• Languages: English
• ISSNs: 1742-1772

Abstract

Abstract: This paper develops a new methodology of spatial econometric modelling for regional public investment in local economies. The approach, based on the financial concept of net present value of cash flows, can be applied in the analysis of regional public investment with long-term financial inputs and outputs. With local public revenues related to spending in the model, one can observe economies of scale of investment with possible saturation effects and a marginal investment multiplier, explaining the extent to which public investment costs translate into public revenues. The main advantage of the proposed model is to behave counter-cyclically due to accumulation over the periods and to cover multi-period investments as well as postponed effects. This paper gives an example of public investment efficiency in Polish NUTS-5 municipalities regions.