Roads and Innovation

Ajay Agrawal, Alberto Galasso and Alexander Oettl

No 10113, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study the interplay between transportation infrastructure, knowledge flows, and innovation. Exploiting historical data on planned portions of the interstate highway system, railroads, and exploration routes as sources of exogenous variation, we estimate the effect of U.S. interstate highways on regional innovation. We find that a 10% increase in a region's stock of highways causes a 1.7% increase in regional patenting over a five-year period. We show that roads facilitate the flow of local knowledge and allow innovators to access more distant knowledge inputs. This finding suggests that transportation infrastructure may spur regional growth above and beyond the more commonly discussed agglomeration economies that are predicated on an inflow of new workers.

Keywords: Regional growth; Innovation; Transportation; Highways (search for similar items in EconPapers)
JEL-codes: L91 O33 O47 (search for similar items in EconPapers)
Date: 2014-08
New Economics Papers: this item is included in nep-ino, nep-sbm, nep-tre and nep-ure
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Citations: View citations in EconPapers (5)

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Journal Article: Roads and Innovation (2017)
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