This article intends to investigate the impact of the public spending on transports over the economic growth in the Brazilian states between the years of 1986 and 2007, using panel data. Besides the traditional model of fixed effects, it was also decided to run a quantile regression model. The results of this study showed that public investment in transportation causes positive and statistically significant effect on the long-term economic performance of the Brazilian states and potentially contribute to the reduction of income inequality between them. Also according to the empirical evidence found, public spending on transportation infrastructure is more productive in less developed regions of the country (North, Northeast and Midwest). Thus, the paper shows that public policies implemented in the country are very important for promoting economic growth and regional development in Brazil.
economic growth; public spending on transportation; quantile regression; panel data