Regional Public Investment and Regional Economic Growth : Study Using Spatial Econometrics Panel Data Approach

Abstract

Regional public investment gained momentum after the adoption of advanced regionalization, becoming an important research topic and instrument of public policies to reshape the Moroccan political and economic scene. This article analyzes the impact of public investment on economic growth following a regional and spatial logic. The objective of this study is to detect spatial effects in the estimation of Lee and Yu's QMLE by examining the relationship between regional public investment and regional economic growth over the period 2015-2019 based on the principles of spatial econometrics. The results show a marginal or weak effect of regional public investment, while regional employment remains a determining factor of regional economic growth. As for the effects of spatial diffusion, regional GDP remains a better instrument to combat against spatial inequalities.