Analysis reveals transportation infrastructure maintenance affects economic production in German counties, suggesting urgent public investment needs.
We analyse the impact of transportation infrastructure capital and its maintenance status on regional economic production, exploiting panel data on the German county level (N = 401) between 2007 and 2016 in a spatial translog production function. Various SLX and SDEM models are estimated using FGLS and GMM estimators accounting for endogeneity. We find a positive impact of the transport infrastructure capital locally and supra-regionally, and provide evidence that insufficient maintenance and low infrastructure conditions significantly slow economic growth. The analysis shows that this effect is mainly driven by the Bundesstraßen network as the backbone of the regional German road system.
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Gaus et al. (2021) studied this question.
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