Purpose- This paper aims to contribute to the debate on the drivers of the productivity gap that exists between the UK and its major international competitors. Design/methodology/approach- From the macro perspective the paper explores the quantitative evidence on the productivity differentials...

The authors model the channels through which public expenditure on infrastructure influences firm value and shapes its investment decisions via both adjustment costs and marginal profitability of capital. The authors test these hypotheses using a large panel of Italian firms. Empirical results...