Nobody's gonna slow me down? The effects of a transportation cost shock on firm performance and behavior

Catarina Branco, Dirk Dohse, João Pereira dos Santos and José Tavares

No 949, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: This paper takes a deep and comprehensive look into the firm-level behavioral reactions to a massive transportation cost shock. Exploiting rich data encompassing the universe of Portuguese private firms and a natural experiment we find that the introduction of tolls on previously toll-free highways caused a substantial decrease of turnover and firm profits. In response to the tolls, firms reduced expenses, cutting employment-related expenses and purchases of other inputs in a similar magnitude. Labor costs were reduced by employment cuts rather than by wage cuts. We find evidence for increased firm exit in treated municipalities, but not for increased re-location.

Keywords: road tolls; infrastructure; firm performance; firm behavior; location; Portugal (search for similar items in EconPapers)
JEL-codes: L25 R12 R48 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-bec, nep-eff, nep-eur, nep-sbm, nep-tre and nep-ure
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https://www.econstor.eu/bitstream/10419/253395/1/1800307748.pdf (application/pdf)

Related works:
Journal Article: Nobody’s gonna slow me down? The effects of a transportation cost shock on firm performance and behavior (2023)
Working Paper: Nobody’s gonna slow me down? The effects of a transportation cost shock on firm performance and behavior (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:949

DOI: 10.4419/96973112

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