Transportation Infrastructure, Industrial Productivity, and Return on Investment Spatial Spillover Approach

This study examined the North American Industrial Classification System based manufacturing industry (NAICS 31-33) from 1997 to 2010 in a cost-based framework. First, both profit and production function models were constructed and estimated for the U.S. manufacturing industry at the state level to allow for spatial spillovers and interactions. A model based on profit and production provided an alternative approach to the dual-cost function. Elasticities associated with infrastructure investment and industry total costs were determined by the inclusion of data on transportation infrastructure spending. Results of the spatial econometric models and the computed elasticities were then delivered in a geographic information system.