Regional infrastructure and firm investment. Theory and empirical evidence for Italy

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 639

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Theory ; Externalities
• Subject: regional infrastructure ; firm's value ; corporate investment ; Infrastrukturinvestition ; Regionale Entwicklung ; Geschäftswert ; Investition ; Anpassungskosten ; Regionale Disparität ; Italien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Aiello, Francesco ; Iona, Alfonsina ; Leonida, Leone
• Event: Veröffentlichung
• (who): Queen Mary University of London, Department of Economics
• (where): London
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/55161
• Last update: 10.03.2025, 11:42 AM CET