Published: March 2004, Atlantic Economic Journal 32:1 Public Capital and Small Firm Performance (2003)
BibTeX
@MISC{Christ03published:march,
author = {Kevin Christ and Richard Green},
title = {Published: March 2004, Atlantic Economic Journal 32:1 Public Capital and Small Firm Performance},
year = {2003}
}
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Abstract
ABSTRACT: Previous research on the role of public capital (infrastructure) in private production has emphasized potential complementarities between public and private capital at an aggregate level. Presumably such effects, if they exist, arise from benefits enjoyed by individual units of production. Because of the potential for them to be location-specific or capital constrained, it is conceivable that small businesses may benefit disproportionately from public capital. Tests using financial data for 871 small firms from 1992 to 1996 indicate a positive and statistically significant elasticity between private labor productivity and the level of public capital in the area where the firms are located. Such a positive elasticity provides further evidence that public and private capital are complementary inputs into production, and has important policy implications.
Keyphrases
public capital small firm performance atlantic economic journal private capital important policy implication aggregate level individual unit private labor productivity financial data positive elasticity private production small firm previous research small business potential complementarity complementary input significant elasticity
