Productivity Growth and Infrastructure Related Sectors

Fernando Navajas; Hildegart Ahumada; Santos Espina Mairal

doi:10.24215/18521649e043

Authors

Fernando Navajas Universidad Torcuato Di Tella, Academia Nacional de Ciencias Económicas, Argentina https://orcid.org/0009-0009-3270-8824
Hildegart Ahumada Universidad de Buenos Aires, Academia Nacional de Ciencias Económicas, Fundación de Investigaciones Económicas Latinoamericanas, Argentina https://orcid.org/0000-0002-0329-8434
Santos Espina Mairal Universidad del CEMA, Argentina https://orcid.org/0000-0002-8724-0618

DOI:

https://doi.org/10.24215/18521649e043

Keywords:

labor productivity, infrastructure, panel data, automatic selection

Abstract

There is no complete agreement on which infrastructure sector matters most for growth, with results that may depend on the data and methodology employed. We develop a framework to explore the performance of infrastructure-related sectors in terms of their contribution to sectoral productivity growth. Based on a selection of 25 countries from the GGDC global data set on annual labor productivity for 10 sectors across 4 decades and chosen controls, we use an automatic algorithm to select variables and estimate short and long-run effects. Estimated elasticities show differential effects across sectors and the quantitative magnitude of these effects is quite significant. Productivity shocks in energy infrastructure dominates those in transport infrastructure for aggregate effects, but they operate indirectly through agriculture productivity while transport improvements have direct impacts. Our results do not seem to support the hypothesis that infrastructure productivity shocks increase productivity gaps or disparities among sectors. Finally, we illustrate the relative magnitude of direct/indirect effects and sectoral channels simulating infrastructure productivity shocks for the LAC region.

Author Biographies

Fernando Navajas, Universidad Torcuato Di Tella, Academia Nacional de Ciencias Económicas, Argentina

Chief Economist at the Foundation for Latin American Economic Research (FIEL), professor in the Department of Economics at the School of Economic Sciences, University of Buenos Aires (UBA), member of the National Academy of Economic Sciences of Argentina (ANCE), and former president of the Argentine Association of Political Economy (AAEP).

He previously pursued his academic career (from 1979 to 2021) at his alma mater—since primary school—the National University of La Plata (UNLP). He also served as Senior Economist at the ECLAC–United Nations Office in Buenos Aires and as Chief of Staff of Advisors at the Ministry of Economy of Argentina. He holds a Ph.D. in Economics from the University of Oxford and a B.A. in Economics (with honors, highest GPA) from UNLP. He has published numerous works in books and academic journals on a wide range of topics in applied macroeconomics, public economics, regulation, and energy and environmental economics. In 2016, he received the KONEX Platinum Award in Applied Economic Analysis, and in 2017, the medal and diploma for academic excellence from the University of Buenos Aires. His career is profiled in Juan Carlos De Pablo’s book Ten Argentine Economists (Ed. Unión).
Hildegart Ahumada, Universidad de Buenos Aires, Academia Nacional de Ciencias Económicas, Fundación de Investigaciones Económicas Latinoamericanas, Argentina

Professor at Universidad Torcuato Di Tella and President (2025–2028) of the National Academy of Economic Sciences. She holds an M.Phil. in Economics from the University of Oxford and is a John S. Guggenheim Fellow. She previously served as President of the Argentine Association of Political Economy, Head of Economic Research at the Central Bank of the Argentine Republic, and Visiting Researcher at Nuffield College (University of Oxford) in 1993 and 2007. Her main research areas encompass a broad range of econometric approaches (time series, panel data, and forecasting) applied to the study and projection of macroeconomic and sectoral variables. Her most cited contributions relate to money demand, consumption decisions, the shadow economy, commodity prices, and the econometrics of climate change, as well as to automatic model selection in econometrics. Her publications include articles in Econometrics, International Journal of Forecasting, Agricultural Economics, Empirical Economics, Journal of Forecasting, Economics Letters, Review of Income and Wealth, Journal of Policy Modeling, Oxford Bulletin of Economics and Statistics, Economics of Natural Disasters and Climate Change, Económica (UNLP), and Journal of Applied Economics (UCEMA), among others.
Santos Espina Mairal, Universidad del CEMA, Argentina

He holds a B.A. in Economics from Universidad del CEMA, where he graduated with honors as top of his class, and a Master’s degree in Neuroscience from Universidad Favaloro. He worked as an Economist at FIEL, where he continues as a Visiting Researcher, and is currently dedicated to Data Science. He also participates in research in both economics and neuroscience, with scientific publications in journals in both fields.

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