On the effects of highway investment on the regional concentration of economic activity in the USA

Abstract

The empirical results in this note are based on state-level VAR esti- mates using private output, employment, and investment, as well as diff erent measures of highway investment to capture, for each state, both the direct effects of highway investment in the state itself and spillover effects of highway investment in other states. Empirical results suggest that the largest states tend to also be the biggest beneficiaries of highway investments which means that highway investment has not only contributed to regional concentration of economic activity but has done so in many of the largest states thereby contributing to regional asymmetries in the country.