This article applies a method of Mark and Sul (2003 Mark, NC and Sul, D. 2003. Cointegration vector estimation by panel DOLS and long-run money demand. Oxford Bulletin of Economics and Statistics, 65: 655–80. [Crossref], [Web of Science ®] , [Google Scholar]) to deal with one of potential endogeneity issues that accompany estimation of a log-linear Cobb–Douglas production function with public capital. We show that if nonstationarity in data is admitted, the panel cointegration approach is useful for obtaining more precise estimates of the output elasticity of public capital.