DEPARTMENT OF ECONOMICS WORKING PAPERS 24 HANNU PIEKKOLA Transport investment in railways to generate knowledge transfer from interfirm worker mobility VAASA 2016 ISBN 978—952—476—667—8 (online) III Publisher Date of publication Vaasan yliopisto March 2016 Corresponding author Type of publication Hannu Piekkola Working Papers
[email protected] tel. +358 44 0244349 Name and number of series Department of Economics. Working Papers, 24 Contact information ISBN University of Vaasa 978-952-476-667-8 (online) Department of Economics P.O. Box 700 FI-65101 Vaasa Number of pages Language Finland 42 English Title of publication Transport investment in railways to generate knowledge transfer from interfirm worker mobility Abstract An analysis using extensive Finnish microdata reveals new insights into economic returns on transport investments. Cost-benefit analysis is combined with returns to new intangible and human capital from interfirm worker mobility. Halving travel time to one hour in the Helsinki-Turku railway corridor increases commuting by 40% and yields annual returns of 30 million 2015€ in time savings and travel costs and 40-50 million € from new intangible and human capital. Two-thirds of gains are from new intangible capital, and one- third is from new human capital. These are largely explained by new jobs in the Helsinki metropolitan area. Keywords transport, railway, labor market, intangible capital, growth accounting JEL classification: H40, O47, O33, O32, J30, J21 IV Contents 1 Introduction ...................................................................................... 1 2 Cost-benefit analysis and changes in commuting and worker mobility ............................................................................................ 4 3 Production and new IC and HC ........................................................ 13 4 Performance-based intangible and human capital ...........................