| This dissertation examines the productivity impact of infrastructure investment on the economic growth of the Mexican regional manufacturing sector, using a production function approach. The relationship between infrastructure investment and regional productivity has been subject to considerable recent debate. This dissertation focuses on issues such as (1) the impact of public capital on the manufacturing productivity, (2) types of public capital most important for the productivity of manufacturing industry, (3) the impact of the infrastructure investment policies carried out during the import substitution industrialization and export oriented industrialization strategies on manufacturing productivity, and (4) public policy implications.;This study addresses these questions by providing new proxies at the state level for three components of capital investment; electricity, transport and communications. The main emphasis of this dissertation, therefore, is to fill this gap in the literature by using cross-sectional data across states.;Results of cross-sectional analysis at the state level suggest that manufacturing productivity growth responds positively to increases in public capital investment. The findings also show that networks infrastructure---especially transport and communication---has an important role to explaining productivity differences in the Mexican manufacturing sector.;In light of these results, increases in public investment have a positive net impact on regional manufacturing growth. However, the only way to assure that a public investment program would make a significant contribution to manufacturing productivity is by having a regional infrastructure investment policy in terms of effective infrastructure endowment indicators to capture the contribution of infrastructure investment on regional manufacturing productivity. |
