Public Capital and Private Sector Productivity

Academic research in the U.S. and more recently in the U.K. and Sweden, has highlighted punlic capital as a significant growth determinant. Pul\blic capital, it is argued, has a positive effect on private sector output, productivity and capital formation. However, controversy surrounds the empirical results emerging from literature. Much of the controversy rests on research methods employed. This paper adds to this body of literature in two ways.