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New road infrastructure: the effects on firms

Gibbons, Stephen ORCID: 0000-0002-2871-8562, Lyytikainen, Teemu, Overman, Henry G. ORCID: 0000-0002-3525-7629 and Sanchis-Guarner, Rosa (2017) New road infrastructure: the effects on firms. SERC Discussion Papers (SERCDP0214). Spatial Economics Research Centre, London School of Economics and Political Science, London, UK.

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Abstract

This paper estimates the impact of new road infrastructure on employment and labour productivity using plant level longitudinal data for Britain. Exposure to transport improvements is measured through changes in accessibility, calculated at a detailed geographical scale from changes in minimum journey times along the road network. These changes are induced by the construction of new road link schemes. We deal with the potential endogeneity of scheme location by identifying the effects of changes in accessibility from variation across small-scale geographical areas close to the scheme. We find substantial positive effects on area level employment and number of plants. In contrast, for existing firms we find negative effects on employment coupled with increases in output per worker and wages. A plausible interpretation is that new transport infrastructure attracts transport intensive firms to an area, but with some cost to employment in existing businesses.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.spatialeconomics.ac.uk/SERC/publication...
Additional Information: © 2017 The Authors
Divisions: Geography & Environment
Spatial Economics Research Centre
Centre for Economic Performance
What Works Centre
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HE Transportation and Communications
JEL classification: D - Microeconomics > D2 - Production and Organizations > D24 - Production; Cost; Capital and Total Factor Productivity; Capacity
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O18 - Regional, Urban, and Rural Analyses
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
Date Deposited: 24 Jul 2017 07:57
Last Modified: 13 Sep 2024 20:38
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/83637

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