IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v35y2014icp211-219.html
   My bibliography  Save this article

Does high-speed rail generate spillovers on local budgets?

Author

Listed:
  • Hernández, Aday
  • Jiménez, Juan Luis

Abstract

High-Speed Rail (HSR) infrastructure is costly and requires high investment during the construction and operation periods, which is mainly financed with public funds. This economic effort is seldom set off, which leads to subsidies with the money collected from public debt growth or tax pressure increases. The question that immediately emerges is whether the entrance of this new infrastructure generates economic spillovers at the local level and, consequently, improves local public budgets. To solve this question we use local data on economic activity, municipalities׳ characteristics and local financial data in Spain for the past decade (2001–2010). Our estimations by difference-in-difference analysis and using spatial data yield a general conclusion: when HSR comes to town, both local revenues and the local fiscal gap improve by mean 10% and 16%, respectively. These improvements primarily affect municipalities located within 5km of an HSR station.

Suggested Citation

  • Hernández, Aday & Jiménez, Juan Luis, 2014. "Does high-speed rail generate spillovers on local budgets?," Transport Policy, Elsevier, vol. 35(C), pages 211-219.
    • Handle: RePEc:eee:trapol:v:35:y:2014:i:c:p:211-219
    DOI: 10.1016/j.tranpol.2014.06.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X14001243
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tranpol.2014.06.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    2. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    3. Antoni Castells & Alejandro Esteller & Maite Vilalta, 2004. "Full Characterisation of the Political Economy of Fiscal Adjustment: Evidence from Spanish Municipalities," Working Papers 2004/3, Institut d'Economia de Barcelona (IEB).
    4. Rosenthal, Stuart S. & Strange, William C., 2001. "The Determinants of Agglomeration," Journal of Urban Economics, Elsevier, vol. 50(2), pages 191-229, September.
    5. Daniel Albalate, 2008. "Lowering blood alcohol content levels to save lives: The European experience," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(1), pages 20-39.
    6. Linda Veiga & Francisco Veiga, 2007. "Political business cycles at the municipal level," Public Choice, Springer, vol. 131(1), pages 45-64, April.
    7. Antoni Castells & Alejandro Esteller & Maite Vilalta, 2004. "Full Characterisation of the Political Economy of Fiscal Adjustment: Evidence from Spanish Municipalities," Working Papers 2004/3, Institut d'Economia de Barcelona (IEB).
    8. Sophie Masson & Romain Petiot, 2009. "Can the High Speed Rail reinforce tourism attractiveness? The case of the High Speed Railway section between Perpignan (France) and Barcelona (Spain)," Post-Print hal-02422659, HAL.
    9. Ashenfelter, Orley & Card, David, 1985. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 648-660, November.
    10. Sole-Olle, Albert, 2006. "Expenditure spillovers and fiscal interactions: Empirical evidence from local governments in Spain," Journal of Urban Economics, Elsevier, vol. 59(1), pages 32-53, January.
    11. Carroll, Robert & Wasylenko, Michael J., 1994. "Do State Business Climates Still Matter? -- Evidence of a Structural Change," National Tax Journal, National Tax Association;National Tax Journal, vol. 47(1), pages 19-37, March.
    12. Douglas R. Dalenberg & Mark D. Partridge & Dan S. Rickman, 1998. "Public Infrastructure: Pork or Jobs Creator?," Public Finance Review, , vol. 26(1), pages 24-52, January.
    13. Veronica Grembi & Tommaso Nannicini & Ugo Troiano, 2011. "Policy Responses to Fiscal Restraints: A Difference-in-Discontinuities Design," Working Papers 397, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    14. Daniel Albalate & Germà Bel & Xavier Fageda, 2012. "Beyond the efficiency-equity dilemma: Centralization as a determinant of government investment in infrastructure," Papers in Regional Science, Wiley Blackwell, vol. 91(3), pages 599-615, August.
    15. Engen, Eric M. & Skinner, Jonathan, 1996. "Taxation and Economic Growth," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(4), pages 617-642, December.
    16. Francisco Delgado & Matías Mayor, 2011. "Tax mimicking among local governments: some evidence from Spanish municipalities," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 10(2), pages 149-164, August.
    17. Albert Solé-Ollé, 2006. "The effects of party competition on budget outcomes: Empirical evidence from local governments in Spain," Public Choice, Springer, vol. 126(1), pages 145-176, January.
    18. Dembour, Carole & Wauthy, Xavier, 2009. "Investment in public infrastructure with spillovers and tax competition between contiguous regions," Regional Science and Urban Economics, Elsevier, vol. 39(6), pages 679-687, November.
    19. Allers, Maarten & de Haan, Jakob & Sterks, Cees, 2001. "Partisan Influence on the Local Tax Burden in the Netherlands," Public Choice, Springer, vol. 106(3-4), pages 351-363, March.
    20. Moshe Givoni, 2006. "Development and Impact of the Modern High‐speed Train: A Review," Transport Reviews, Taylor & Francis Journals, vol. 26(5), pages 593-611, January.
    21. Santiago Lago-Peñas, 2008. "Local Governments' Asymmetric Reactions to Grants," Public Finance Review, , vol. 36(2), pages 219-242, March.
    22. Sophie Masson & Romain Petiot, 2009. "Can the high speed rail reinforce tourism attractiveness ? The case of the hagh speed rail between Perpignan (france) and Barcelona (Spain)," Post-Print hal-03062650, HAL.
    23. Carroll, Robert & Wasylenko, Michael J., 1994. "Do State Business Climates Still Matter? -- Evidence of a Structural Change," National Tax Journal, National Tax Association, vol. 47(1), pages 19-37, March.
    24. Modest Fluvià & Ricard Rigall-i-Torrent & Anna Garriga, 2008. "Déficit en la provisión local de servicios públicos y tipología municipal," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 16(3), pages 111-132, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Ailian & Pan, Mengmeng & Liu, Bai & Cao, Xianbin, 2023. "Do high-speed rail (HSR) station and airport affect local government debt risk? Evidence from China," Transport Policy, Elsevier, vol. 134(C), pages 41-51.
    2. Mu, Rui & de Jong, Martin & Ma, Yongchi & Xi, Bao, 2015. "Trading off public values in High-Speed Rail development in China," Journal of Transport Geography, Elsevier, vol. 43(C), pages 66-77.
    3. Sun, Wenhao & Gao, Jijun & Jacoby, Gady & Wu, Zhenyu, 2024. "Access to capital and energy efficiency: How high-speed rail investments benefit high-tech firms," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 91(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Voltes-Dorta, Augusto & Jiménez, Juan Luis & Suárez-Alemán, Ancor, 2014. "An initial investigation into the impact of tourism on local budgets: A comparative analysis of Spanish municipalities," Tourism Management, Elsevier, vol. 45(C), pages 124-133.
    2. Francisco J. Delgado & Santiago Lago-Peñas & Matías Mayor, 2015. "On The Determinants Of Local Tax Rates: New Evidence From Spain," Contemporary Economic Policy, Western Economic Association International, vol. 33(2), pages 351-368, April.
    3. Piyapong Jiwattanakulpaisarn & Robert Noland & Daniel Graham & John Polak, 2006. "Highway Infrastructure Investment and Regional Employment Growth: Dynamic Panel Regression Analysis," ERSA conference papers ersa06p207, European Regional Science Association.
    4. Chakrabarti, Sandip, 2018. "Can highway development promote employment growth in India?," Transport Policy, Elsevier, vol. 69(C), pages 1-9.
    5. Piyapong Jiwattanakulpaisarn & Robert B. Noland & Daniel J. Graham & John W. Polak, 2009. "Highway Infrastructure Investment And County Employment Growth: A Dynamic Panel Regression Analysis," Journal of Regional Science, Wiley Blackwell, vol. 49(2), pages 263-286, May.
    6. Piyapong Jiwattanakulpaisarn & Robert B. Noland & Daniel J. Graham & John W. Polak, 2009. "Highway infrastructure and state‐level employment: A causal spatial analysis," Papers in Regional Science, Wiley Blackwell, vol. 88(1), pages 133-159, March.
    7. Chong Ye & Yanhong Zheng & Shanlang Lin & Zhaoyang Zhao, 2022. "The Impact of High-Speed Railway Opening on Regional Economic Growth: The Case of the Wuhan–Guangzhou High-Speed Railway Line," Sustainability, MDPI, vol. 14(18), pages 1-22, September.
    8. David Alan Aschauer, 2000. "Do states optimize? Public capital and economic growth," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 34(3), pages 343-363.
    9. Zhou Bo & Li Ningqiao, 2018. "The impact of high-speed trains on regional tourism economies," Tourism Economics, , vol. 24(2), pages 187-203, March.
    10. Zhang, Yanyan & Ma, Wenliang & Yang, Hangjun & Wang, Qiang, 2021. "Impact of high-speed rail on urban residents’ consumption in China—from a spatial perspective," Transport Policy, Elsevier, vol. 106(C), pages 1-10.
    11. Yanyan Gao & Xinping Wang, 2023. "Chinese agriculture in the age of high‐speed rail: Effects on agricultural value added and food output," Agribusiness, John Wiley & Sons, Ltd., vol. 39(2), pages 387-405, March.
    12. Daniel Albalate del sol, 2015. "Evaluating HSR availability on Tourism: Evidence from Spanish Provinces and Cities," ERSA conference papers ersa15p288, European Regional Science Association.
    13. Martin Zagler & Georg Dürnecker, 2003. "Fiscal Policy and Economic Growth," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 397-418, July.
    14. Jiwattanakulpaisarn, Piyapong & Noland, Robert B. & Graham, Daniel J., 2010. "Causal linkages between highways and sector-level employment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(4), pages 265-280, May.
    15. W. Robert Reed, 2009. "The Determinants Of U.S. State Economic Growth: A Less Extreme Bounds Analysis," Economic Inquiry, Western Economic Association International, vol. 47(4), pages 685-700, October.
    16. Bo Zhou & Zhihong Wen & Ian Sutherland & Seul Ki Lee, 2022. "The spatial heterogeneity and dynamics of tourism-flow spillover effect: The role of high-speed train in China," Tourism Economics, , vol. 28(2), pages 300-324, March.
    17. Astrid Landschoot, 2004. "Sovereign credit spreads and the composition of the government budget," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 140(3), pages 510-524, September.
    18. Stefanie Vanneste & Stijn Goeminne, 2020. "The role of the past in public policy: empirical evidence of the long-term effect of past policy and politics on the local budget balance," Economics of Governance, Springer, vol. 21(1), pages 75-99, March.
    19. Xinshuo Hou, 2019. "High-Speed Railway and City Tourism in China: A Quasi-Experimental Study on HSR Operation," Sustainability, MDPI, vol. 11(6), pages 1-19, March.
    20. Boto-García, David & Pérez, Levi, 2023. "The effect of high-speed rail connectivity and accessibility on tourism seasonality," Journal of Transport Geography, Elsevier, vol. 107(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:35:y:2014:i:c:p:211-219. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.