Highways and firm performance in the logistics industry

Abstract

Using detailed geo-referenced data we analyse the effects of highway development on firm level performance in the Spanish logistics sector. To address potential endogeneity issues we carry out panel data analysis together with instrumental variable estimation. Results show that highways have significant implications for logistics' firm performance, although with important spatial heterogeneity. For urban logistics firms, a reduction in the distance to their nearest highway increases their productivity performance. In contrast, for rural logistics firms, improvements in highway access show a positive impact on employment growth but have also led to a reduction in productivity growth for those rural logistics firms that remained outside highway corridors.