This paper incorporates infrastructure into the production function as part
of the technological constraint rather than as a discretionary factor inpu
t. Our theoretical model specifies a technological growth rate as a nonline
ar function of infrastructure and a time trend, the latter capturing the ef
fect of all other variables on the growth rate in technology. The time tren
d and infrastructure are modeled so as to be interactive rather than additi
ve. The functional form estimated allows for a 'S'-shaped production functi
on which embodies not only the properties of a long-run production function
but also those exhibited in the short run. (C) 1999 Elsevier Science S.A.
All rights reserved. JEL classification. C5 econometric modeling; O4, econo
mic growth and aggregate productivity.