Naslov
Public investments and regional income convergence: empirical analysis of Croatian regions

Autori
Drezgić, Saša

Izvornik
Social research: interdisciplinary approach (1392-3110) 3 (2011), 24; 43-55

Vrsta, podvrsta i kategorija rada
Radovi u časopisima, članak, znanstveni

Ključne riječi
public investments; regional income; convergence; Croatia

Sažetak
Despite interventions in the form of redistributive transfers, in the most advanced economies the economic problem of lagging regions has persisted. This is also the case in Croatian regions, with significant disparities in terms of regional income, employment rates and development of infrastructure. However, growth rates vary across regions in Croatia. One of the reasons for these fluctuations is attributed to different growth rates of capital accumulation. This observation reflects findings in the contemporary research, which suggests that public investment, are the most efficient tool for equalizing regional income disparities. The results in this paper do not show clear-cut evidence on positive effect of public capital on regional economic convergence. On the contrary, it seems that the regional disparities intensified in the period of increased government investment activity. Part of the reasons for lack of evidence might be in low level of efficiency of public investments. In certain regions there are visible effects of public investments in form of temporary increase of wages and employment. There is also certain evidence of “crowd-in” effects of public investments. However, data span is too short to be able to determine significant long-term benefits of public investments on regional and intraregional income distribution.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA