The influence of the road network on private productivity measures using Data Envelopment Analysis: A case study from Spain

• We use the Data Envelopment Analysis (DEA) in order to estimate the production frontier and the efficiency levels.
• We estimate the variations in TFP and its components by means of Malmquist productivity indices.
• We analyze the impact of road network capital stock on TFP using a new dataset at provincial level in Spain.
• We draw relevant policy guidelines that can serve public officials to design strategies to improve economic growth.

We evaluate the economic effects of investment in the road network on private regional activity. We employ provincial Spanish panel data from 1980 to 2007 to perform non-parametric frontier techniques based on Data Envelopment Analysis and to obtain the Malmquist productivity indexes, thus enabling us to examine the evaluation of the productivity growth via technological changes or efficiency gains. Additionally, we analyze the role of transport infrastructure on the evolution of Total Factor Productivity and its components through econometric techniques. Our results show important spillover effects. Moreover, our findings have significant implications for policy makers if we take into account the fact that the use of the road network in economic activity or in commercial relations greatly influences productivity growth.