How does transportation facilitate regional economic development? A heuristic mapping of the literature

Abstract

Despite a growing body of literature, the relationship between transport investment and regional economic development remains elusive. Individual studies highlight certain aspects but neglect others, and yet do not add up to a holistic framework. This paper engages with this gap by developing a holistic conceptual framework based on the synthesis of the literature. A list of variables and relationships were extracted and classified into a broad framework representing common elements of a regional economic system. Then, a causal loop diagram (CLD) was produced as a conceptual model by employing a system dynamics method that captures the interaction of the elements. The conceptual model reveals that the underlying mechanisms of regional economic development represent a complex and dynamic process engaging multiple factors, causalities, and temporal dynamics. Transport investment improves the attractiveness of regions and generates economic activities, reinforcing further investments, thereby fostering regional GDP and urban growth. The conditions of interregional transport infrastructure determine where cities can emerge and grow, and urban transport infrastructure conditions guide how big (population) and wide (area) a city can become. Three additional soft policies (urban transport, urban policies, and institutions and innovation) influence the attractiveness of regions and their economic activities. The time and scales of the policy inputs may produce different outcomes, i.e., city(ies) size and regional GDP, leading to income inequality across regions. We conclude that the generated conceptual model offers a distinct contribution by originally mapping the links between different studies and provides an overarching framework for further explorations.