Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/55161 
Year of Publication: 
2009
Series/Report no.: 
Working Paper No. 639
Publisher: 
Queen Mary University of London, Department of Economics, London
Abstract: 
We model the channels through which public expenditure on infrastructure influences firm value and shapes its investment decisions via both adjustment costs and marginal profitability of capital. We test these hypotheses by using a large panel of Italian firms. Empirical results show that infrastructure interacts with revenues and costs in shaping firm's profitability of capital and influences its adjustment costs. Finally we find that infrastructure expenditure contributes to reduce the economic gap between the North and the South of Italy. These effects vary across regions and sectors.
Subjects: 
regional infrastructure
firm's value
corporate investment
JEL: 
D21
D62
D92
Document Type: 
Working Paper

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