IDEAS home Printed from https://ideas.repec.org/a/sae/urbstu/v55y2018i13p2838-2862.html
   My bibliography  Save this article

Transit-oriented economic development: The impact of light rail on new business starts in the Phoenix, AZ Region, USA

Author

Listed:
  • Kevin Credit

Abstract

This article examines the impact of Phoenix’s light rail system, which opened in 2008, on new firm formation in specific industries. Individual business data from 1990–2014 are used in a quasi-experimental adjusted-interrupted time series (AITS) regression to compare the impact of the transit system’s construction on new business starts in ‘treatment’ and ‘control’ areas before and after the opening of the line. Findings show that the transit adjacency is worth an 88% increase in knowledge sector new starts, a 40% increase in service sector new starts and a 28% increase in retail new starts at the time the system opened, when compared with automobile-accessible control areas. However, the light rail also appears to suffer from a ‘novelty factor’– after the initial increase in new establishment activity in adjacent block groups, the effect diminishes at the rate of 8%, 6% and 7% per year, respectively. The results also provide insight into the spatial extent of light rail impacts to new business formation, with areas 1 mile from stations observing 21% fewer retail new business starts and 12% fewer knowledge sector new starts than areas within a quarter of a mile of stations.

Suggested Citation

  • Kevin Credit, 2018. "Transit-oriented economic development: The impact of light rail on new business starts in the Phoenix, AZ Region, USA," Urban Studies, Urban Studies Journal Limited, vol. 55(13), pages 2838-2862, October.
    • Handle: RePEc:sae:urbstu:v:55:y:2018:i:13:p:2838-2862
    DOI: 10.1177/0042098017724119
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0042098017724119
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0042098017724119?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
    ---><---

    References listed on IDEAS

    as
    1. Lisa A. Sturtevant & Yu Jin Jung, 2011. "Are We Moving Back to the City? Examining Residential Mobility in the Washington, DC Metropolitan Area," Growth and Change, Wiley Blackwell, vol. 42(1), pages 48-71, March.
    2. Jenny Schuetz, 2015. "Do rail transit stations encourage neighbourhood retail activity?," Urban Studies, Urban Studies Journal Limited, vol. 52(14), pages 2699-2723, November.
    3. Guerra, Erick & Cervero, Robert & Tischler, Daniel, 2011. "The Half-Mile Circle: Does It Represent Transit Station Catchments?," University of California Transportation Center, Working Papers qt0d84c2f4, University of California Transportation Center.
    4. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 377-393, May.
    5. Yena Song & Keumsook Lee & William Anderson & T. Lakshmanan, 2012. "Industrial agglomeration and transport accessibility in metropolitan Seoul," Journal of Geographical Systems, Springer, vol. 14(3), pages 299-318, July.
    6. Michael Storper & Anthony J. Venables, 2004. "Buzz: face-to-face contact and the urban economy," Journal of Economic Geography, Oxford University Press, vol. 4(4), pages 351-370, August.
    7. Guerra, Erick & Cervero, Robert & Tischler, Daniel, 2011. "The Half-Mile Circle: Does It Best Represent Transit Station Catchments?," University of California Transportation Center, Working Papers qt9jd6r1t9, University of California Transportation Center.
    8. Landis, John & Guhathakurta, Subhrajit & Zhang, Ming, 1994. "Capitalization of Transit Investments into Single-Family Home Prices: A Comparative Analysis of Five California Rail Transit Systems," University of California Transportation Center, Working Papers qt80f3p5n1, University of California Transportation Center.
    9. Erik Stam, 2007. "Why Butterflies Don’t Leave: Locational Behavior of Entrepreneurial Firms," Economic Geography, Taylor & Francis Journals, vol. 83(1), pages 27-50, January.
    10. De Bruijn, Hans & Veeneman, Wijnand, 2009. "Decision-making for light rail," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(4), pages 349-359, May.
    11. Bollinger, Christopher R. & Ihlanfeldt, Keith R., 1997. "The Impact of Rapid Rail Transit on Economic Development: The Case of Atlanta's MARTA," Journal of Urban Economics, Elsevier, vol. 42(2), pages 179-204, September.
    12. Daniel Chatman & Robert Noland, 2011. "Do Public Transport Improvements Increase Agglomeration Economies? A Review of Literature and an Agenda for Research," Transport Reviews, Taylor & Francis Journals, vol. 31(6), pages 725-742.
    13. Jan K. Brueckner, 2000. "Urban Sprawl: Diagnosis and Remedies," International Regional Science Review, , vol. 23(2), pages 160-171, April.
    14. Mohammad, Sara I. & Graham, Daniel J. & Melo, Patricia C. & Anderson, Richard J., 2013. "A meta-analysis of the impact of rail projects on land and property values," Transportation Research Part A: Policy and Practice, Elsevier, vol. 50(C), pages 158-170.
    15. Cervero, Robert & Landis, John, 1997. "Twenty years of the Bay Area Rapid Transit system: Land use and development impacts," Transportation Research Part A: Policy and Practice, Elsevier, vol. 31(4), pages 309-333, July.
    16. Daniel G. Chatman, 2013. "Does TOD Need the T?," Journal of the American Planning Association, Taylor & Francis Journals, vol. 79(1), pages 17-31, January.
    17. Guerra, Erick & Cervero, Robert & Tischler, Daniel, 2011. "The Half-Mile Circle: Does It Best Represent Transit Station Catchments?," University of California Transportation Center, Working Papers qt68r764df, University of California Transportation Center.
    18. Ian R. Gordon & Philip McCann, 2000. "Industrial Clusters: Complexes, Agglomeration and/or Social Networks?," Urban Studies, Urban Studies Journal Limited, vol. 37(3), pages 513-532, March.
    19. Wennekers, Sander & Thurik, Roy, 1999. "Linking Entrepreneurship and Economic Growth," Small Business Economics, Springer, vol. 13(1), pages 27-55, August.
    20. Claudio A. Agostini & Gastón A. Palmucci, 2008. "The Anticipated Capitalisation Effect of a New Metro Line on Housing Prices," Fiscal Studies, Institute for Fiscal Studies, vol. 29(2), pages 233-256, June.
    21. Koen Frenken & Frank Van Oort & Thijs Verburg, 2007. "Related Variety, Unrelated Variety and Regional Economic Growth," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 685-697.
    22. Pagliara, Francesca & Papa, Enrica, 2011. "Urban rail systems investments: an analysis of the impacts on property values and residents’ location," Journal of Transport Geography, Elsevier, vol. 19(2), pages 200-211.
    23. Bjorn Asheim & Helen Lawton Smith & Christine Oughton, 2011. "Regional Innovation Systems: Theory, Empirics and Policy," Regional Studies, Taylor & Francis Journals, vol. 45(7), pages 875-891.
    24. Cervero, Robert, 2004. "Effects of Light and Commuter Rail Transit on Land Prices: Experiences in San Diego County," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 43(1).
    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. Kangmin Wu & Yang Wang & Yuyao Ye & Hongou Zhang & Guangqing Huang, 2019. "Relationship Between the Built Environment and the Location Choice of High-Tech Firms: Evidence from the Pearl River Delta," Sustainability, MDPI, vol. 11(13), pages 1-21, July.
    2. Tyndall, Justin, 2021. "The local labour market effects of light rail transit," Journal of Urban Economics, Elsevier, vol. 124(C).
    3. Jan Ženka & Ondřej Slach & Igor Ivan, 2020. "Spatial Patterns of Knowledge-Intensive Business Services in Cities of Various Sizes, Morphologies and Economies," Sustainability, MDPI, vol. 12(5), pages 1-19, March.
    4. Champagne, Marie-Pier & Dubé, Jean, 2023. "The impact of transport infrastructure on firms’ location decision: A meta-analysis based on a systematic literature review," Transport Policy, Elsevier, vol. 131(C), pages 139-155.
    5. Jianyi Li & Douglas Webster & Jianming Cai & Larissa Muller, 2019. "Innovation Clusters Revisited: On Dimensions of Agglomeration, Institution, and Built-Environment," Sustainability, MDPI, vol. 11(12), pages 1-15, June.
    6. Kamruzzaman, Liton, 2024. "Subjective vs. objective assessment of the economic impacts of light rail transit: The case of G:Link in Gold Coast, Australia," Journal of Transport Geography, Elsevier, vol. 117(C).
    7. Champagne, Marie-Pier & Dubé, Jean & Legros, Diègo, 2024. "Standing strong? The causal impact of metro stations on service firms’ survival," Transportation Research Part A: Policy and Practice, Elsevier, vol. 181(C).
    8. Tornabene, Sara & Nilsson, Isabelle, 2021. "Rail transit investments and economic development: Challenges for small businesses," Journal of Transport Geography, Elsevier, vol. 94(C).
    9. Jackson, Sara L. & Buckman, Joshua, 2020. "Light rail development with or without gentrification?: Neighborhood perspectives on changing sense of place in Denver, Colorado," Journal of Transport Geography, Elsevier, vol. 84(C).
    10. Elina Sukaryavichute & Elizabeth Delmelle & Colleen Hammelman, 2021. "Opportunities and challenges for small businesses in new transit neighborhoods: Understanding impacts through in‐depth interviews," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 1025-1041, June.
    11. Shima Hamidi & Ahoura Zandiatashbar, 2019. "Does urban form matter for innovation productivity? A national multi-level study of the association between neighbourhood innovation capacity and urban sprawl," Urban Studies, Urban Studies Journal Limited, vol. 56(8), pages 1576-1594, June.
    12. Liu, Chang & Bardaka, Eleni, 2023. "Transit-induced commercial gentrification: Causal inference through a difference-in-differences analysis of business microdata," Transportation Research Part A: Policy and Practice, Elsevier, vol. 175(C).
    13. Chang, Haoliang & Huang, Jianxiang & Yao, Weiran & Zhao, Weizun & Li, Lishuai, 2022. "How do new transit stations affect people's sentiment and activity? A case study based on social media data in Hong Kong," Transport Policy, Elsevier, vol. 120(C), pages 139-155.
    14. Helen XH Bao & Johan P Larsson & Vivien Wong, 2021. "Light at the end of the tunnel:The impacts of expected major transport improvements on residential property prices," Urban Studies, Urban Studies Journal Limited, vol. 58(14), pages 2971-2990, November.
    15. Champagne, Marie-Pier & Dubé, Jean & Barla, Philippe, 2022. "Build it and they will come: How does a new public transit station influence building construction?," Journal of Transport Geography, Elsevier, vol. 100(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. Zhong, Haotian & Li, Wei, 2016. "Rail transit investment and property values: An old tale retold," Transport Policy, Elsevier, vol. 51(C), pages 33-48.
    2. Kamruzzaman, Liton, 2024. "Subjective vs. objective assessment of the economic impacts of light rail transit: The case of G:Link in Gold Coast, Australia," Journal of Transport Geography, Elsevier, vol. 117(C).
    3. Champagne, Marie-Pier & Dubé, Jean, 2023. "The impact of transport infrastructure on firms’ location decision: A meta-analysis based on a systematic literature review," Transport Policy, Elsevier, vol. 131(C), pages 139-155.
    4. Bishal Bhakta Kasu & Guangqing Chi, 2018. "The Evolving and Complementary Impacts of Transportation Infrastructures on Population and Employment Change in the United States, 1970–2010," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 37(6), pages 1003-1029, December.
    5. Heilmann, Kilian, 2018. "Transit access and neighborhood segregation. Evidence from the Dallas light rail system," Regional Science and Urban Economics, Elsevier, vol. 73(C), pages 237-250.
    6. Devaux, Nicolas & Dubé, Jean & Apparicio, Philippe, 2017. "Anticipation and post-construction impact of a metro extension on residential values: The case of Laval (Canada), 1995–2013," Journal of Transport Geography, Elsevier, vol. 62(C), pages 8-19.
    7. Champagne, Marie-Pier & Dubé, Jean & Legros, Diègo, 2024. "Standing strong? The causal impact of metro stations on service firms’ survival," Transportation Research Part A: Policy and Practice, Elsevier, vol. 181(C).
    8. Yu, Haitao & Jiao, Junfeng & Houston, Eric & Peng, Zhong-Ren, 2018. "Evaluating the relationship between rail transit and industrial agglomeration: An observation from the Dallas-fort worth region, TX," Journal of Transport Geography, Elsevier, vol. 67(C), pages 33-52.
    9. Aliyu Ahmad Aliyu & Olurotimi Adebowale Kemiki & Muhammad Umar Bello, 2018. "Transportation Accessibility Benefit and the Dynamic Pattern of Real Estate Prices: Emerging Literature," Traektoriâ Nauki = Path of Science, Altezoro, s.r.o. & Dialog, vol. 4(11), pages 1001-1016, November.
    10. Elina Sukaryavichute & Elizabeth Delmelle & Colleen Hammelman, 2021. "Opportunities and challenges for small businesses in new transit neighborhoods: Understanding impacts through in‐depth interviews," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 1025-1041, June.
    11. Feldman, Maryann P. & Kogler, Dieter F., 2010. "Stylized Facts in the Geography of Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 381-410, Elsevier.
    12. Vale, David S. & Viana, Cláudia M. & Pereira, Mauro, 2018. "The extended node-place model at the local scale: Evaluating the integration of land use and transport for Lisbon's subway network," Journal of Transport Geography, Elsevier, vol. 69(C), pages 282-293.
    13. Martijn J. Burger & Frank G. Oort & Otto Raspe, 2011. "Agglomeration and New Establishment Survival: A Mixed Hierarchical and Cross-Classified Model," Advances in Spatial Science, in: Karima Kourtit & Peter Nijkamp & Roger R. Stough (ed.), Drivers of Innovation, Entrepreneurship and Regional Dynamics, pages 45-63, Springer.
    14. Pearson, Jonathan & Muldoon-Smith, Kevin & Liu, Henry & Robson, Simon, 2022. "How does the extension of existing transport infrastructure affect land value? A case study of the Tyne and Wear Light Transit Metro system," Land Use Policy, Elsevier, vol. 112(C).
    15. Dohyung Kim & Yongjin Ahn & Simon Choi & Kwangkoo Kim, 2016. "Sustainable Mobility: Longitudinal Analysis of Built Environment on Transit Ridership," Sustainability, MDPI, vol. 8(10), pages 1-14, October.
    16. Frank G. van Oort & Martijn J. Burger & Joris Knoben & Otto Raspe, 2012. "Multilevel Approaches And The Firm-Agglomeration Ambiguity In Economic Growth Studies," Journal of Economic Surveys, Wiley Blackwell, vol. 26(3), pages 468-491, July.
    17. Aston, Laura & Currie, Graham & Pavkova, Katerina, 2016. "Does transit mode influence the transit-orientation of urban development? – An empirical study," Journal of Transport Geography, Elsevier, vol. 55(C), pages 83-91.
    18. Jinbao Zhao & Wei Deng & Yan Song & Yueran Zhu, 2014. "Analysis of Metro ridership at station level and station-to-station level in Nanjing: an approach based on direct demand models," Transportation, Springer, vol. 41(1), pages 133-155, January.
    19. Aston, Laura & Currie, Graham & Kamruzzaman, Md. & Delbosc, Alexa & Teller, David, 2020. "Study design impacts on built environment and transit use research," Journal of Transport Geography, Elsevier, vol. 82(C).
    20. Elisabeth Bublitz & Michael Fritsch & Michael Wyrwich, 2015. "Balanced Skills and the City: An Analysis of the Relationship between Entrepreneurial Skill Balance, Thickness, and Innovation," Economic Geography, Clark University, vol. 91(4), pages 475-508, October.

    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:sae:urbstu:v:55:y:2018:i:13:p:2838-2862. 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: SAGE Publications (email available below). General contact details of provider: http://www.gla.ac.uk/departments/urbanstudiesjournal .

    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.