To be connected or not to be connected? The role of long-haul economies

Hans R.A. Koster, Takatoshi Tabuchi*, Jacques François Thisse

*Corresponding author for this work

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Abstract

We investigate whether localities gain or lose employment when there are connected to a transportation network, such as a high-speed railway line. We argue that long-haul economies - implying that the marginal transportation cost decreases with network distance - play a pivotal role in understanding the location choices of firms. We develop a new spatial model to show that improvements in transportation infrastructure have nontrivial impacts on the location choices of firms. Using data on Japan's Shinkansen, we show that 'in-between' municipalities that are connected to the Shinkansen witness a sizable decrease in employment.

Original languageEnglish
Pages (from-to)711-753
Number of pages43
JournalJournal of Economic Geography
Volume22
Issue number4
DOIs
Publication statusPublished - Jul 2022

Bibliographical note

Publisher Copyright:
© 2021 The Author(s). Published by Oxford University Press. All rights reserved.

Funding

FundersFunder number
Japan Society for the Promotion of Science22K01484

    Keywords

    • Firm location
    • High-speed rail
    • Japan
    • Long-haul-economies
    • Shinkansen

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