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

Open Access Publications from Kiel Institute for the World Economy from Kiel Institute for the World Economy (IfW Kiel)

Abstract: We study the firm-level responses to a substantial increase in transportation costs in the wake of a quasi-experiment that introduced tolls in a subset of Portuguese highways. Exploiting a unique dataset encompassing the universe of Portuguese private firms, we find that the introduction of tolls caused a substantial decrease in turnover (−10.2%) and productivity (−4.3%) in treated firms vis-à-vis firms in the comparison group. In response to the tolls, firms substantially cut employment-related expenses and purchases of other inputs. Labor costs were reduced by both employment cuts and a decrease in average wages. While firms did not increase inventory, there is some evidence for increased firm exit, in particular by firms in tradables sectors.

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: 2023
New Economics Papers: this item is included in nep-bec, nep-eff, nep-eur, nep-geo, nep-sbm, nep-tre and nep-ure
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Citations: View citations in EconPapers (5)

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Journal Article: 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:ifwkie:273314

DOI: 10.1016/j.jue.2023.103569

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