Road concessions: Evidence of the effects of improving the transport infrastructure on economic development in Brazil

Abstract

This study uses quasi-random variation in the implementation of the Federal Highway Concession Program in Brazil to examine the impact of improved access on regional economic development. The survey analyzed data from municipalities between 2007 and 2017, employing the difference-in-differences methodology with staggered adoption. The results suggest that the program contributed to a reduction in the number of fatal accidents and an increase in tax collection for municipalities crossed by the road concessions. However, the results for GDP and GDP of the services sector varied in terms of the initial year of concession, the accumulated concession time, and the calendar year. Locations that spent more time in the concessions had a positive return on GDP, while the effect of participation in the program on GDP was negative for groups treated later. The conclusions of this study have important practical implications for managers seeking to implement, expand or refine road concession policies.