Transport infrastructure investment: implications for growth and productivity

Expanding Airport Capacity under Constraints in Large Urban Areas: Summary and Conclusions of the Roundtable held on 21-22 February 2013

“…As far as the positive impacts are concerned, there is an extensive body of research evidence which demonstrates the key importance of transport (and good transport infrastructure) for productivity and economic growth (see Crafts (2009) for an overview). The critical -and more challenging -question, in the present context, is to work out what this contribution might look like for particular airport infrastructure investments.…”

“…In particular, recent research shows that investments that improve the transport links serving the central business districts (CBDs) of major urban areas may show significant additional productivity benefits. This is due to three considerationsagglomeration economies (that is, the advantages that firms might realise from being located closer together), more effective product market competition, and improved labour supply (see Crafts (2009) for a discussion). In one case -London's Crossrail -these three considerations together added broadly 50% to the estimated economic benefits of the project.…”

“…An extensive body of research evidence demonstrates the critical importance of transport (and good transport infrastructure) for productivity and growth (see Crafts (2009) for an overview). The research suggests that, in many cases, the benefits to productivity and growth from better transport links can be measured reasonably well on the basis of the improved prices and service quality to travellers and shippers (see Crafts (2009), Eddington (2006 and HEATCO (2006) for a discussion).…”

“…The research suggests that, in many cases, the benefits to productivity and growth from better transport links can be measured reasonably well on the basis of the improved prices and service quality to travellers and shippers (see Crafts (2009), Eddington (2006 and HEATCO (2006) for a discussion). But this is not always the case; in particular the research evidence shows that investments in transport links to the central business districts of major cities may show significant additional productivity benefits due to:…”

“…But it is possible that some additional productivity benefits might be expected, for example the economic benefit of reduced international trade costs. However, there is not, at present, a body of accepted research evidence to suggest whether these additional productivity benefits might be significant, or how large they might be, see again Crafts (2009) andHEATCO (2006).…”