Impact of public capital on productivity and growth.

Summary Our research focuses on the relationship between public capital and productivity and economic growth. Under the term "public capital", we consider the basic infrastructure equipment involved in any productive process. In the first part, we introduce public capital at the heart of the dynamics of endogenous growth models. Thus, we discuss the fiscal distortions generated by the financing of infrastructure. From this model, we derive a contradiction for the government depending on the time horizon of its economic policy. In a second model, the interaction between the evolution of public capital and income growth generates an endogenous dynamic with multiple equilibria whose interpretation refers to circular processes of divergence between economies. The second part is devoted to the empirical verification of our research topic. On the one hand, the econometric appreciation of the transitional dynamics of the Solow augmentation model validates the positive and significant contribution of infrastructure to growth. On the other hand, the study of the direction of causality of our relationship attests to the validity of the reciprocal causality hypothesis exploited in our theoretical approach. In a third and final part, we isolate the fundamental influence of public capital on the spatial distribution of productive activities. In a model of economic geography, we illustrate the power of attraction that quality public services exert on the location choice of firms. Thus, in a configuration of economic integration, differences in infrastructure endowments are likely to be at the origin of a polarization of industrial activities. Empirically, this spatial dynamic is partly confirmed by our economic evaluation of the determinants of intra-EU direct investment.