Regional economic effects of transport infrastructure expansions: Evidence from the Swiss highway network Stephan Fretz∗ and Christoph Gorgasyz April 2013 Preliminary { please do not quote without authors' permission. JEL Classification: H54, O18 Keywords: Infrastructure; Transportation; Regional Development; Synthetic Control Abstract Expansions of transport infrastructure networks may have substantial impacts on the development of regions. Observable regional economic effects do not necessarily reflect effi- ciency gains, however; they may also stem from redistribution across regions. In this paper, we propose that efficiency gains result from an improvement in the absolute accessibility of regions, whereas redistribution is caused by changes in their relative accessibility. We investigate this hypothesis based on expansions of the Swiss highway network. Using the synthetic control method developed in Abadie, Diamond and Hainmueller (2010), we an- alyze whether specific highway network expansions led to increases in regional income per capita. We find that effects vary strongly across the different cases. As expected, we observe the largest impact when both absolute and relative accessibility of a region increase. ∗University of St. Gallen, Switzerland. E-mail:
[email protected] yUniversity of Lucerne, Switzerland. E-mail:
[email protected] zWe thank Lukas Buchheim, Regina Fischer, Simon L¨uchinger, Christian Marti, J¨orgSchl¨apfer,Christian Schmid, and seminar participants at the University of St. Gallen for helpful comments and suggestions. We are also grateful to the Swiss Federal Roads Office for providing the opening dates of the different sections of the Swiss national road network. 1 Introduction Transport infrastructure networks have long been recognized as a key ingredient to economic growth and development.