Economic Activity and Transportation Access

Abstract

Several studies of transportation and economic development impacts have recognized the extent to which changes in accessibility triggered by transportation improvements may translate into business cost savings and contribute to a region's economic competitiveness. This paper specifies and empirically tests a general model that captures the intensity of business activity (at the zip code level) as a function of local and regional accessibility, agglomeration economies, and region-specific effects. The geographic area of analysis is a four-county region in Maryland. The econometric analysis establishes a significant association between transportation supply and business activity in the study area. The findings suggest a clear positive association between access to primary highway facilities and the level of economic activity. The results also confirm expectations that roads with higher functional form and capacity are likely to be spatially associated with a higher intensity of economic activity. The models described in the paper provide the basis for examining regional economic effects related to new transportation facilities.