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New road infrastructure: the effects on firms

Gibbons, Stephen, Lyytikäinen, Teemu, Overman, Henry ORCID: 0000-0002-3525-7629 and Sanchis-Guarner, Rosa (2019) New road infrastructure: the effects on firms. Journal of Urban Economics, 110. pp. 35-50. ISSN 0094-1190

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Identification Number: 10.1016/j.jue.2019.01.002


This paper estimates the impact of new road infrastructure on employment and labour productivity using firm 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 establishments. For existing establishments we find increases in output per worker, wages and use of intermediate inputs. A plausible interpretation is that new transport infrastructure attracts transport intensive establishments to an area, and also leads to some reorganization of production in existing businesses.

Item Type: Article
Official URL:
Additional Information: © 2019 The Authors
Divisions: Spatial Economics Research Centre
Subjects: G Geography. Anthropology. Recreation > G Geography (General)
H Social Sciences > H Social Sciences (General)
H Social Sciences > HD Industries. Land use. Labor
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: 17 Jan 2019 16:58
Last Modified: 20 Oct 2021 00:40
Projects: ES/J021342/1, ES/G005966/1, ES/M010341/1
Funders: Economic and Social Research Council, Yrjö Jahnsson Foundation, Bank of Spain, British Academy

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