Productivity Impact of Infrastructure in Turkey, 1987–2006

Abstract

This paper explores the impact of some key infrastructure measures in transportation, telecommunication, and electricity production sectors on labor productivity, using data on two-digit sectors for the Turkish economy for the years 1987–2006. We find both statistical and economic significance for the positive productivity impact of infrastructure on productivity growth, for road, port, and air transport, telecommunications, and electricity production. In the railway sector, only measures of actual freight carried are consistently and significantly associated with productivity growth, whereas other measures of infrastructure are insignificantly or inversely associated with productivity growth. Given that the railway-transport sector is the only infrastructure sector that remains closed to competition and private participation, this raises the issue of the significance of private sector involvement in infrastructure provision.