From periphery to core: measuring agglomeration effects using high-speed rail

Ahlfeldt, Gabriel M. ORCID: 0000-0001-5664-3230 and Feddersen, Arne (2018) From periphery to core: measuring agglomeration effects using high-speed rail. Journal of Economic Geography, 18 (2). pp. 355-390. ISSN 1468-2702

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Abstract

We analyze the economic impact of the German high-speed rail (HSR) connecting Cologne and Frankfurt, which provides plausibly exogenous variation in access to surrounding economic mass. We find a causal effect of about 8.5% on average of the HSR on the GDP of three counties with intermediate stops. We make further use of the variation in bilateral transport costs between all counties in our study area induced by the HSR to identify the strength and spatial scope of agglomeration forces. Our most careful estimate points to an elasticity of output with respect to market potential of 12.5%. The strength of the spillover declines by 50% every 30 minutes of travel time, diminishing to 1% after about 200 minutes. Our results further imply an elasticity of per-worker output with respect to economic density of 3.8%, although the effects seem driven by worker and firm selection.

Item Type:	Article
Official URL:	https://academic.oup.com/joeg
Additional Information:	© 2017 The Authors
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor > HD100 Land Use H Social Sciences > HE Transportation and Communications
JEL classification:	R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R38 - Government Policies; Regulatory Policies R - Urban, Rural, and Regional Economics > R4 - Transportation Systems > R48 - Government Pricing; Regulatory Policies
Date Deposited:	09 Mar 2017 12:25
Last Modified:	23 Nov 2024 01:48
URI:	http://eprints.lse.ac.uk/id/eprint/69763

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