Abstract
The formation of new firms is one process by which economies grow and innovate. Public transportation services may facilitate the birth of new firms by both providing better access and causing local densification that leads to agglomeration economies. In this study firm births are investigated to determine how they are related to newly provided light rail transit service in two metropolitan areas in the United States. A geocoded time-series database of firm establishments in Dallas, Texas, and Portland, Oregon, from 1991 through 2008 is used. The data set allows the study of spatial patterns by industry and the analysis of the relationship of firm births to rail station proximity, accessibility, and local agglomeration while controlling for a number of potentially confounding factors. Positive, large, and statistically significant relationships are found in Portland between rail station proximity and firm births. The rail proximity results in Dallas are also generally positive, though not as large; this finding is consistent with the smaller accessibility value of rail in Dallas, as well as policies encouraging commercial development near rail in Portland. Rail proximity increases firm births across almost all industrial sectors in both of these metropolitan areas when controlling for the negative effects on firm births of local own-industry employment. Local block-level agglomeration and generalized accessibility are also highly significant but appear to work independently of rail access. These results imply that passenger rail service increases firm births near rail stations by expanding access to the labor market but not by increasing information spillovers or increasing face-to-face interactions.
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