OECD/ITF Joint Transport Research Centre Discussion Papers

The International Transport Forum at the OECD is an intergovernmental organisation with 52 member countries. It acts as a strategic think tank for transport policy and organizes an annual summit of ministers. Our work is underpinned by economic research, statistics collection and policy analysis, often undertaken in collaboration with many of the world's leading research figures in academia, business and government. This series of Discussion Papers is intended to disseminate the International Transport Forum’s research findings rapidly among specialists in the field concerned.

English, French

Agglomeration Economies and Transport Investment

This paper is concerned with the links between agglomeration, productivity and transport investment. If improvements in transport systems give rise to changes in the mass of economic activity accessible to firms, for instance by reducing travel times or the costs of travel, then they can induce positive benefits via agglomeration economies. The paper presents empirical results from an econometric analysis of the relationship between productivity and accessibility to economic activity for different sectors of the UK economy. The results show that agglomeration economies do exist and that they can be substantial, particularly for services. Furthermore, the effect of agglomeration externalities is not trivial when considered in the context of transport appraisal. Initial calculations typically indicate additions to conventional user benefits of 10%-20% arising from increasing returns to economic mass.


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