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Transit-oriented economic development: The impact of light rail on new business starts in the Phoenix, AZ Region, USA

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  • Kevin Credit

Abstract

This article examines the impact of Phoenix’s light rail system, which opened in 2008, on new firm formation in specific industries. Individual business data from 1990–2014 are used in a quasi-experimental adjusted-interrupted time series (AITS) regression to compare the impact of the transit system’s construction on new business starts in ‘treatment’ and ‘control’ areas before and after the opening of the line. Findings show that the transit adjacency is worth an 88% increase in knowledge sector new starts, a 40% increase in service sector new starts and a 28% increase in retail new starts at the time the system opened, when compared with automobile-accessible control areas. However, the light rail also appears to suffer from a ‘novelty factor’– after the initial increase in new establishment activity in adjacent block groups, the effect diminishes at the rate of 8%, 6% and 7% per year, respectively. The results also provide insight into the spatial extent of light rail impacts to new business formation, with areas 1 mile from stations observing 21% fewer retail new business starts and 12% fewer knowledge sector new starts than areas within a quarter of a mile of stations.

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  • Kevin Credit, 2018. "Transit-oriented economic development: The impact of light rail on new business starts in the Phoenix, AZ Region, USA," Urban Studies, Urban Studies Journal Limited, vol. 55(13), pages 2838-2862, October.
    • Handle: RePEc:sae:urbstu:v:55:y:2018:i:13:p:2838-2862
    DOI: 10.1177/0042098017724119
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    8. Chang, Haoliang & Huang, Jianxiang & Yao, Weiran & Zhao, Weizun & Li, Lishuai, 2022. "How do new transit stations affect people's sentiment and activity? A case study based on social media data in Hong Kong," Transport Policy, Elsevier, vol. 120(C), pages 139-155.
    9. Jianyi Li & Douglas Webster & Jianming Cai & Larissa Muller, 2019. "Innovation Clusters Revisited: On Dimensions of Agglomeration, Institution, and Built-Environment," Sustainability, MDPI, vol. 11(12), pages 1-15, June.
    10. Elina Sukaryavichute & Elizabeth Delmelle & Colleen Hammelman, 2021. "Opportunities and challenges for small businesses in new transit neighborhoods: Understanding impacts through in‐depth interviews," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 1025-1041, June.
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