Does the composition of public expenditure affect economic growth? Evidence from the Swiss case

In the light of tightening budget constraints caused by the recent financial and economic crisis and population ageing, it has become increasingly important to explore which portfolio of public expenditure generates economic growth. This article, therefore, estimates the growth effects of the composition of public expenditure for the Swiss case. One main finding is that public expenditures on transport infrastructure, education and administration foster growth. As nonhigh-quality data, which can bias least square estimators, are pervasive in economics, statistically robust estimation methods are applied.