Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71068
Authors: 
Kneller, Richard
Misch, Florian
Year of Publication: 
2013
Series/Report no.: 
ZEW Discussion Paper 13-014
Abstract: 
This paper exploits the unique institutional features of South Africa to estimate the impact of provincial public spending on health, education and transport on firm productivity. Our identification strategy is based on within industry-province differences between firms of the effects of public spending. We show that public spending composition affects firm productivity depending on the capital intensity of firms relative to the province-industry mean. Our data and empirical specification allow us to rule out that these results are affected by econometric problems that are commonly encountered when estimating the effects of fiscal policy and by unobserved industry- or province-specific productivity shocks. In contrast to related existing microeconomic evidence, we take into account the government budget constraint so that our results have clear policy implications.
Subjects: 
Public Spending Composition
Productive Public Spending
Firm Productivity
JEL: 
D24
H32
H72
O12
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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