Transport investment in railways to generate knowledge transfer from interfirm worker mobility

Abstract

An analysis using extensive Finnish microdata reveals new insights into economic returns on transport investments. Cost-benefit analysis is combined with returns to new intangible and human capital from interfirm worker mobility. Halving travel time to one hour in the Helsinki-Turku railway corridor increases commuting by 40% and yields annual returns of 30 million 2015€ in time savings and travel costs and 40-50 million € from new intangible and human capital. Two-thirds of gains are from new intangible capital, and one-third is from new human capital. These are largely explained by new jobs in the Helsinki metropolitan area.