Abstract:
Several studies of transportation and economic development impact have recognized the extent to which transportation investments may improve access to markets and, by doing so, influence firms’ location decisions. A study specified and empirically tested a firm-level model that captures the relationship between the propensity of a particular firm to relocate from its current business location as a function of local and regional accessibility, agglomeration economies, firm-specific characteristics, business-specific activity attributes, attitudes toward regional considerations, and factors that influenced the initial business location decision. The geographic area of analysis considers a four-county region in Maryland. The econometric analysis establishes significant association between transportation supply and firm-level relocation decisions in the study area and underscores the role of other firm and area-of-influence attributes in this process. The findings suggest a positive association between access to primary highway facilities and the level of economic activity. The results also confirm expectations that roads with higher functional form and capacity are likely to be more influential in the location and relocation decisions of businesses. The described model estimates could provide a basis for predicting the potential impact of local economic development policies in firm retention strategies.
