Large scale infrastructure investment and economic performance – a case study of Oresund

ABSTRACT

We analyse the effect of a large scale infrastructure investment, namely the construction of the Oresund bridge, on the local and supra-regional economy. We employ the synthetic control method to construct counterfactual regions that mimic the trajectory of Malmo and Southern Sweden without treatment. Our results point to a positive effect. However, placebo tests in space and time only reveal statistical significance at a larger regional level. The results suggest that spillover effects are eminent.

KEYWORDS:

• Synthetic control method
• policy evaluation
• infrastructure
• regional economics

JEL CLASSIFICATION:

• F10
• H54
• R10

Supplemental data

Supplemental data for this article can be accessed here.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ NUTS – Nomenclature of Territorial Units for Statistics is the standardized three-level classification for regional statistics in the European Union.

² The results only differ marginally when the average GDPpc is calculated over more (or less) points in time. But, more points in time weaken the impact of other predictor variables.

³ For a comparison to the former RMSPE see Tables A2 and A3 in the Appendix.