Public infrastructure capital, scale economies and returns to variety

*** Statistically significant at 1% level, ** Statistically significant at 5% level, * Statistically significant at 10% level

*** Statistically significant at 1% level, ** Statistically significant at 5% level, * Statistically significant at 10% level

In order to circumvent this problem, these authors used a regression similar to the previous
one, but with the addition of the private inputs of production, private capital, and labour. This method
has also been followed here and the results for these augmented regressions are given in tables 16 to
19. The form of this equation becomes:
nit - Kit + Lit + Git +^t + ^uit

(notation as in previous equations)

However, even this augmented regression generally fails to produce significant results for the
infrastructure variable. The only exceptions are the cases for social capital in the regional panel where
a positive relationship holds (table 16) and for productive public capital in the metropolitan area of
Athens, where the coefficient is negative (table 18). It has to be noted, nevertheless, that both these
coefficients are statistically significant only at the ten percent level. However, perhaps the salient point
is that generally the coefficients are negative.

Table 16 Infrastructure effects on the equilibrium number of firms (augmented regression):
Regional panel for total manufacturing, 1982-1991

Dependent Variable: ln of Number of Manufacturing Establishments_____________________________________________________________________________

*** Statistically significant at 1% level, ** Statistically significant at 5% level, * Statistically significant at 10% level

Table 17 Infrastructure effects on the equilibrium number of firms (augmented regression): Greece panel
for sectors, 1982-1991

Dependent Variable: ln of Number of Manufacturing Establishments_____________________________________________________________________________

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