To be connected or not to be connected? The role of long-haul economies

Do rural roads create pathways out of poverty? Evidence from India

Hans Koster, Takatoshi Tabuchi and Jacques Thisse

Journal of Economic Geography, 2022, vol. 22, issue 4, 711-753

Abstract: We investigate whether localities gain or lose employment when there are connected to a transportation network, such as a high-speed railway line. We argue that long-haul economies—implying that the marginal transportation cost decreases with network distance—play a pivotal role in understanding the location choices of firms. We develop a new spatial model to show that improvements in transportation infrastructure have nontrivial impacts on the location choices of firms. Using data on Japan’s Shinkansen, we show that ‘in-between’ municipalities that are connected to the Shinkansen witness a sizable decrease in employment.

Keywords: Long-haul-economies; firm location; high-speed rail; Japan; Shinkansen (search for similar items in EconPapers)
JEL-codes: D43 R12 R40 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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