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The Effects of Highway Tolls on Private Business Activity – Results from a Natural Experiment

Author

Listed:
  • João Pereira dos Santos

    (Nova School of Business and Economics, Universidade Nova de Lisboa, Campus de Campolide)

  • David B. Audretsch

    (Institute for Development Studies, Indiana University, 1315 East 10th Street, SPEA Room 201, Bloomington)

  • Dirk Christian Dohse

    (Kiel Institute for the World Economy, Kiellinie 66, 24105 Kiel, Germany)

Abstract

The paper studies the impact of a switch from free to charged highway provision on firm numbers and private sector employment in a panel of Portuguese municipalities covering the period 2007–2013. It exploits the fact that tolls on certain highways in Portugal were unexpectedly introduced in reaction to the sovereign debt crisis to establish causality. Results from a difference-in-differences analysis indicate a significantly negative effect of highway tolls on number of firms and employment in treated municipalities vis-à-vis the comparison group. We also find negative effects of tolls in municipalities not directly traversed by the treated highways, with larger firms and manufacturing firms being most strongly affected.

Suggested Citation

  • João Pereira dos Santos & David B. Audretsch & Dirk Christian Dohse, 2018. "The Effects of Highway Tolls on Private Business Activity – Results from a Natural Experiment," GEE Papers 0107, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jun 2018.
    • Handle: RePEc:mde:wpaper:0107
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    File URL: https://www.gee.gov.pt/RePEc/WorkingPapers/GEE_PAPERS_107.pdf
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    References listed on IDEAS

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    Cited by:

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    3. Catarina Branco & Dirk C. Dohse & João Pereira Santos & José Tavares, 2022. "The impact of a rise in transportation costs on firm performance and behaviour," GEE Papers 0167, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Sep 2022.
    4. Romano, Patrícia Ribeiro & Bezerra Sampaio, Raquel Menezes, 2023. "Road concessions: Evidence of the effects of improving the transport infrastructure on economic development in Brazil," Transport Policy, Elsevier, vol. 142(C), pages 115-124.

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    More about this item

    Keywords

    infrastructure provision; highway tolls; regional economic development; natural experiment;
    All these keywords.

    JEL classification:

    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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