1. www.bakbasel.com id583 The relation between a Regions‘ Accessibility and Economic Growth Assembly of European Regions Conference: „Low Noise – Low Fare – High Impact“ Eindhoven Airport (NL) 13 and 14 December 2006 Richard Kämpf, BAK Basel Economics

2. www.bakbasel.com id583 Contribution of regional accessibility to economic growth What accessibility to measure? BAK accessibility model Results Contribution of regional accessibility to economic growth Theoretical framework Empirical results: Research Program „Policy and Regional Growth“ Summary of results

3. www.bakbasel.com id583 Definition of accessibility Kay Axhausen (ETHZ): Accessibility can be understood as the number of opportunities available for social and economic life that can be reached within a travel time appropriate to the relevant purpose. ESPON (EU Study Programme on European Spatial Planning): Accessibility ist the main „product“ of a transport system. It determines the locational advantage of an area (i.e. a region, a city or a corridor) relative to all areas (including itself).

4. www.bakbasel.com id583 The model What accessibility to measure? 5 questions have to be answered: 1. Who shall have access?Representatives of international companies and institutions 2. Access to what?Markets for inputs & goods (GDP as activity parameter, outbound accessibility) 3. Which measure for Travel time (fastest connection) spatial impedance? 4. Which traffic modes?Rail, road and air 5. What spatial scale?Global & continental

5. www.bakbasel.com id583 The model List of destinations www.bakbasel.com Global destinations: 120 international airports representing the world economy outside Europe Continental destinations: 291 regional centers representing European economy

6. www.bakbasel.com id583 The model The accessibility function A U =  ( W Z * e  c U Z ) A = Accessibility U = Origin W = Activity (GDP) Z = Destination c = Travel time  = Parameter

7. www.bakbasel.com id583 Network data Calculation of shortest intermodal travel time for every connection Global connections:280 (Origins) x 120 (Destinations) Central station origin  Central station destination outside Europe Fastest connection including: - Access time to departure airport (average of public transport and car access) - Transfer time (change of traffic mode) - Check-in time (destination- and airportspecific) - Flight time including connecting time - time from arrival airport to central station destination Continental connections:280 (Origins) x 291 (Destinations) Central station origin  Central station destination Fastest connection from modes: - Road - Railway - Flight (travel time including access and transfer time departure airport, check-in time, flight time, transfer time at arrival airport and access time from arrival airport to central station destination)

8. www.bakbasel.com id583 www.bakbasel.com Global accessibility 2004 in Europe Source: BAK 100 = total sample 2002

9. www.bakbasel.com id583 Source: BAK 100 = total sample 2002 Global accessibility 2004 Metropolitan cities (2004 vs. 1980)

10. www.bakbasel.com id583 www.bakbasel.com Continental accessibility 2004 in Europe Source: BAK 100 = total sample 2002

11. www.bakbasel.com id583 www.bakbasel.com Road accessibility 2000 in Europe Source: BAK 100 = total sample 2002

12. www.bakbasel.com id583 www.bakbasel.com Railways accessibility 2002 in Europe Source: BAK 100 = total sample 2002

13. www.bakbasel.com id583 Contribution of regional accessibility to economic growth www.bakbasel.com Theoretical framework Approaches to model (regional) economic growth The dimension of „space“ Empirical results: Research Program „Policy and Regional Growth“

14. www.bakbasel.com id583 Policy question:What are the drivers of regional growth? What are the measures decision makers can choose to foster economic growth? BAK research project: Understanding the relation between location factors and Policy and Regional Growthregional growth using empirical and econometric tools How relevant is policy for regional growth? BAK Analytical Approach: 1.Benchmarking: Comparing economic performance and location factors 2.Analysis: Understanding the relationship between performance and location factors 3.Policy: Advice on policy measures and possible trade-offs

15. www.bakbasel.com id583 Database International Benchmarking Database Economic Performance (1980-2005) Indicators: GDP Gross value added Employment Hours worked Productivity (hourly productivity and output per employee) Measures:Gross and real Level and growth (time series 1980 to 2005) In national currency and in common currency Total, per capita Industries:60 different industries (following NACE 2-digit level)

16. www.bakbasel.com id583 Database International Benchmarking Database Location Factors Innovation: Expenditure on R&D* (1980-2003) University quality (Shanghai Index) (2003-2005) Number of higher education degrees* (tertiary degrees) (1990-2005) Education level of labour force* (secondary / tertiary) (1980-2003) Patents* (1990-2005) Bibliometric indicators* (1990-2005) Company start-ups* (1993-2003) Taxation:Taxation of highly qualified employees (1980-2005) Taxation of companies (1980-2005) Regulation:Regulation of product markets (1980-2003) Regulation of labour markets (1980-2003) *Indicators by industries, directly or through subjects/technology fields. Some parts of database still in development.

17. www.bakbasel.com id583 Database International Benchmarking Database Location Factors Accessibility:Global accessibility (1980-2004) Continental accessibility (1980-2004) Labour costs:Wages costs (1980-2004) Unit labour costs (1980-2004) Population:According to gender and different age cohorts (1980-2005) Agglomeration:Agglomeration size Proximity to an agglomeration

18. www.bakbasel.com id583 Theory and observation (questionnaires) can tell which location factors are important … … but they do hardly tell the size of the impact on regional growth Econometric analysis based on the benchmarking database - Basic equation: Growth it = α 0 + α 1 *Global Effect t + α 2 *Structural Effect it + β 1 *L 1it-1 + β 2 *L 2it-1 + … + ε it - Panel data estimation (random effects, fixed effects) with  i = 142 regions  t = 15 years (1990 – 2004)  several location factors (L) Why does a region grow? Econometric analysis

19. www.bakbasel.com id583 Econometric results Coefficients (annual productivity growth, 1990-2003) VariableVariable definitioncoefficientprob. (β i =0) Global Effectoverall sample productivity growth+< 1% Structural Effectproductivity growth for given industry mix+< 1% Company Taxation4 years moving average, relative to sample mean  < 5% Manpower Taxation4 years moving average, relative to sample mean  < 1% Labour Market Regulation4 years moving average, relative to sample mean +< 1% Product Market Regulation4 years moving average, relative to sample mean +< 1% Innovation: Secondary Educ.difference, 4 years moving average+< 1% Innovation: Tertiary Educ.difference, 4 years moving average+< 10% Innovation: R&D Expen.difference, 4 years moving average+< 5% Accessibility: globaldifference, 10 years moving average+< 10% Accessibility: continentaldifference, 10 years moving average  < 1% Regional Spill Overtime invariant  < 5%

20. www.bakbasel.com id583 Source: BAK International Benchmarking Database 2005 Impact on productivity growth, cumulated 1990-2003 (in %-points, max impact against min impact) Impact of location factors Sample-distribution (regions), impact on productivity growth (1990-2003) Coefficient negative

21. www.bakbasel.com id583 Source: BAK International Benchmarking Database 2005 Impact on productivity growth, cumulated 1990-2003 (in %-points) Impact of global accessibility on real productivity growth Changes in global accessibility 1990 - 2003

22. www.bakbasel.com id583 Source: BAK International Benchmarking Database 2005 Impact on productivity growth, cumulated 1990-2003 (in %-points) Impact of spatial spillover effects on real productivity growth

23. www.bakbasel.com id583 Research program on impact of location factors on economic growth Signs of location factors largely as expected from theory & significant Available location factors can only explain a part of the regional variation Impact of accessibility Accessibility matters A better global accessibility increases efficiency and competitiveness and enhances productivity growth A better accessibility is a double-edged sword: On the one hand, it enhances business activities and boosts the attractiveness of a region. On the other hand, it allows high value activities to be delivered from a central region Further research is necessary! Summary of results

24. www.bakbasel.com id583 Further research directions Regional coverage More specific on sources of growth (productivity, hours worked, employment ratio, population) Advanced Methods (system estimation) Add more location factors, especially varying between regions (regulation; fragmentation and decentralization; innovation; …) Industry specific estimations Further research directions (accessibility) Sub samples of regions with similar characteristics Industry specific estimations Research on the intraregional accessibility Mix of macro-economic and micro-economic methods Research agenda

25. www.bakbasel.com id583 Thank you for your attention! Richard Kämpf BAK Basel Economics Güterstrasse 82 Postfach CH-4002 Basel Tel. +41 61 279 97 00 Fax +41 61 279 97 28 richard.kaempf@bakbasel.com