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New road infrastructure: the effects on firms

Gibbons, Stephen and Lyytikainen, Teemu and Overman, Henry G. and Sanchis-Guarner, Rosa (2012) New road infrastructure: the effects on firms. SERC Discussion Papers, SERCDP117. Spatial Economics Research Centre (SERC), London School of Economics and Political Science, London, UK.

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Identification Number: SERCDP117

Abstract

This paper estimates the impact of road improvements on firm employment and productivity using plant level longitudinal data for Britain. Exposure to transport improvements is measured by changes in employment accessibility along the road network. These changes are constructed using data on employment for small geographical units, details of the main road network and of road construction schemes carried out between 1998 and 2007. We deal with the central problem of endogenous scheme placement by using changes due to new road links and exploiting the spatial detail in our data to focus on accessibility changes close to new schemes. We find substantial effects on employment and numbers of plants for small-scale geographical areas (electoral wards), but no employment response at plant level. This suggests that road construction affects firm entry and exit, but not the employment of existing firms. We also find effects on labour productivity and wages at the firm level, although these results are less robust.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.spatialeconomics.ac.uk/SERC/publication...
Additional Information: © 2012 The Authors
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HE Transportation and Communications
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Research centres and groups > Centre for Economic Performance (CEP)
Research centres and groups > What Works Centre for Local Economic Growth (WWG)
Date Deposited: 31 Jul 2014 07:19
Last Modified: 31 Jul 2014 07:19
Funders: Economic and Social Research Council, Department for Business, Innovation & Skills (BIS), Welsh Assembly Government
URI: http://eprints.lse.ac.uk/id/eprint/58527

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