IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp16572.html
   My bibliography  Save this paper

High-Speed Railways and Firms Total Factor Productivity: Evidence from a Quasi-Natural Experiment

Author

Listed:
  • Bottasso, Anna

    (University of Genoa)

  • Conti, Maurizio

    (University of Genoa)

  • Ferrara, Antonella Rita

    (University of Calabria)

  • Robbiano, Simone

    (University of Eastern Piedmont)

Abstract

The focus of this study is to assess the causal impact of the connection of a local area to a high-speed rail network (HSR) on firms' total factor productivity (TFP). The quasi-random location of the HSR station in the Italian city of Reggio Emilia is exploited in a Difference-in Differences (DiD) research design applied to a large sample of firms, observed over the period 2010-2018. The results suggest that the opening of the HSR station improved treated firms' TFP of about 5%; in particular, such effect is larger for firms closer to the HSR station and slightly increases over the sample period. We also find that the impact of the connection to the HSR station is heterogeneous across industries and depends on firms' size and past productivity. Overall results are robust to a large number of sensitivity checks and falsification tests.

Suggested Citation

  • Bottasso, Anna & Conti, Maurizio & Ferrara, Antonella Rita & Robbiano, Simone, 2023. "High-Speed Railways and Firms Total Factor Productivity: Evidence from a Quasi-Natural Experiment," IZA Discussion Papers 16572, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16572
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp16572.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gibbons, Stephen & Lyytikäinen, Teemu & Overman, Henry G. & Sanchis-Guarner, Rosa, 2019. "New road infrastructure: The effects on firms," Journal of Urban Economics, Elsevier, vol. 110(C), pages 35-50.
    2. Jan De Loecker & Pinelopi K. Goldberg & Amit K. Khandelwal & Nina Pavcnik, 2016. "Prices, Markups, and Trade Reform," Econometrica, Econometric Society, vol. 84, pages 445-510, March.
    3. Jan De Loecker, 2013. "Detecting Learning by Exporting," American Economic Journal: Microeconomics, American Economic Association, vol. 5(3), pages 1-21, August.
    4. Anna Bottasso & Maurizio Conti & Simone Robbiano & Marta Santagata, 2022. "Roads to innovation: Evidence from Italy," Journal of Regional Science, Wiley Blackwell, vol. 62(4), pages 981-1005, September.
    5. Francesco Bogliacino & Mario Pianta, 2016. "The Pavitt Taxonomy, revisited: patterns of innovation in manufacturing and services," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 33(2), pages 153-180, August.
    6. Yasusada Murata & Ryo Nakajima & Ryosuke Okamoto & Ryuichi Tamura, 2014. "Localized Knowledge Spillovers and Patent Citations: A Distance-Based Approach," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 967-985, December.
    7. Hans R A Koster & Takatoshi Tabuchi & Jacques-François Thisse, 2022. "To be connected or not to be connected? The role of long-haul economies [Do rural roads create pathways out of poverty? Evidence from India]," Journal of Economic Geography, Oxford University Press, vol. 22(4), pages 711-753.
    8. Daniel F Heuermann & Johannes F Schmieder, 2019. "The effect of infrastructure on worker mobility: evidence from high-speed rail expansion in Germany," Journal of Economic Geography, Oxford University Press, vol. 19(2), pages 335-372.
    9. Gabriel M Ahlfeldt & Arne Feddersen, 2018. "From periphery to core: measuring agglomeration effects using high-speed rail," Journal of Economic Geography, Oxford University Press, vol. 18(2), pages 355-390.
    10. Andrew B. Bernard & Andreas Moxnes & Yukiko U. Saito, 2019. "Production Networks, Geography, and Firm Performance," Journal of Political Economy, University of Chicago Press, vol. 127(2), pages 639-688.
    11. Nathaniel Baum-Snow & Loren Brandt & J. Vernon Henderson & Matthew A. Turner & Qinghua Zhang, 2017. "Roads, Railroads, and Decentralization of Chinese Cities," The Review of Economics and Statistics, MIT Press, vol. 99(3), pages 435-448, July.
    12. Daniel A. Ackerberg & Kevin Caves & Garth Frazer, 2015. "Identification Properties of Recent Production Function Estimators," Econometrica, Econometric Society, vol. 83, pages 2411-2451, November.
    13. INOUE Hiroyasu & NAKAJIMA Kentaro & SAITO Yukiko, 2017. "The Impact of the Opening of High-Speed Rail on Innovation," Discussion papers 17034, Research Institute of Economy, Trade and Industry (RIETI).
    14. Ajay Agrawal & Alberto Galasso & Alexander Oettl, 2017. "Roads and Innovation," The Review of Economics and Statistics, MIT Press, vol. 99(3), pages 417-434, July.
    15. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    16. Dong, Xiaofang & Zheng, Siqi & Kahn, Matthew E., 2020. "The role of transportation speed in facilitating high skilled teamwork across cities," Journal of Urban Economics, Elsevier, vol. 115(C).
    17. Dmitriev, Mikhail & Comin, Diego & Rossi-Hansberg, Esteban, 2012. "The Spatial Diffusion of Technology," CEPR Discussion Papers 9208, C.E.P.R. Discussion Papers.
    18. Stephen Gibbons & Wenjie Wu, 2020. "Airports, access and local economic performance: evidence from China [Are Chinese cities too small?]," Journal of Economic Geography, Oxford University Press, vol. 20(4), pages 903-937.
    19. Gabriele Rovigatti & Vincenzo Mollisi, 2018. "Theory and practice of total-factor productivity estimation: The control function approach using Stata," Stata Journal, StataCorp LP, vol. 18(3), pages 618-662, September.
    20. David L. Rigby & W. Mark Brown, 2015. "Who Benefits from Agglomeration?," Regional Studies, Taylor & Francis Journals, vol. 49(1), pages 28-43, January.
    21. Ejaz Ghani & Arti Grover Goswami & William R. Kerr, 2016. "Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing," Economic Journal, Royal Economic Society, vol. 126(591), pages 317-357, March.
    22. Holl, Adelheid, 2016. "Highways and productivity in manufacturing firms," Journal of Urban Economics, Elsevier, vol. 93(C), pages 131-151.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lisha Wang & Jian Wang & Xuepeng Qian, 2023. "Does the bullet train exacerbate urban shrinkage? Lessons from Japan," Papers in Regional Science, Wiley Blackwell, vol. 102(1), pages 187-212, February.
    2. Wu, Guiying Laura & Feng, Qu & Wang, Zhifeng, 2021. "A structural estimation of the return to infrastructure investment in China," Journal of Development Economics, Elsevier, vol. 152(C).
    3. Kailthya, Subham & Kambhampati, Uma, 2022. "Road to productivity: Effects of roads on total factor productivity in Indian manufacturing," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 174-195.
    4. Fan, Xiaomin & Xu, Yingzhi, 2023. "Does high-speed railway promote urban innovation? Evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 86(C).
    5. Marta Santagata, 2022. "Roads and intra‐national trade: Evidence from Italian regions," Papers in Regional Science, Wiley Blackwell, vol. 101(6), pages 1383-1409, December.
    6. Cheng, Dong & Shi, Xunpeng & Yu, Jian, 2021. "The impact of green energy infrastructure on firm productivity: Evidence from the Three Gorges Project in China," International Review of Economics & Finance, Elsevier, vol. 71(C), pages 385-406.
    7. Anna Bottasso & Maurizio Conti & Simone Robbiano & Marta Santagata, 2022. "Roads to innovation: Evidence from Italy," Journal of Regional Science, Wiley Blackwell, vol. 62(4), pages 981-1005, September.
    8. Martin Gornig & Alexander Schiersch, 2019. "Agglomeration Economies and the Firm TFP: Different Effects across Industries," Discussion Papers of DIW Berlin 1788, DIW Berlin, German Institute for Economic Research.
    9. Bruno de Borger & Ismir Mulalic & Jan Rouwendal, 2019. "Productivity effects of an exogenous improvement in transport infrastructure: accessibility and the Great Belt Bridge," Tinbergen Institute Discussion Papers 19-065/VIII, Tinbergen Institute.
    10. Bruno de Borger & Ismir Mulalic & Jan Rouwendal, 2019. "Productivity effects of an exogenous improvement in transport infrastructure: accessibility and the Great Belt Bridge," Tinbergen Institute Discussion Papers 19-065/VIII, Tinbergen Institute.
    11. Baek, Jisun & Park, WooRam, 2022. "The impact of improved passenger transport system on manufacturing plant productivity," Regional Science and Urban Economics, Elsevier, vol. 96(C).
    12. Chang, Zheng & Zheng, Longfei, 2022. "High-speed rail and the spatial pattern of new firm births: Evidence from China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 155(C), pages 373-386.
    13. Jingbo Cui & Tianqi Li & Zhenxuan Wang, 2023. "Research collaboration beyond the boundary: Evidence from university patents in China," Journal of Regional Science, Wiley Blackwell, vol. 63(3), pages 674-702, June.
    14. Wang, Jiating & Cai, Siyuan, 2020. "The construction of high-speed railway and urban innovation capacity: Based on the perspective of knowledge Spillover," China Economic Review, Elsevier, vol. 63(C).
    15. Geoffrey Barrows & Hélène Ollivier & Ariell Reshef, 2023. "Production Function Estimation with Multi-Destination Firms," CESifo Working Paper Series 10716, CESifo.
    16. Na Li & Haiyan Lu & Yongxin Lv, 2022. "High-Speed Railway Facilities, Intercity Accessibility and Urban Innovation Level—Evidence from Cities in Three Chinese Megacity Regions," Land, MDPI, vol. 11(8), pages 1-16, July.
    17. Alvaro Garcia Marin & Nico Voigtländer, 2018. "Product-Level Efficiency and Core Competence in Multi-Product Plants," 2018 Meeting Papers 737, Society for Economic Dynamics.
    18. Richter, Philipp M. & Schiersch, Alexander, 2017. "CO2 emission intensity and exporting: Evidence from firm-level data," European Economic Review, Elsevier, vol. 98(C), pages 373-391.
    19. Caselli, Mauro & Schiavo, Stefano & Nesta, Lionel, 2018. "Markups and markdowns," Economics Letters, Elsevier, vol. 173(C), pages 104-107.
    20. R. Monin & M. Suarez Castillo, 2020. "Product switching, market power and distance to core competency," Documents de Travail de l'Insee - INSEE Working Papers g2020-06, Institut National de la Statistique et des Etudes Economiques.

    More about this item

    Keywords

    transport infrastructure; Difference-in-Differences; total factor productivity;
    All these keywords.

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp16572. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.