The Impact of Local Infrastructure on New Business Establishments

Extensive previous work on factors affecting regional development has considered the impact of aggregate measures of infrastructure like the public capital stock or individual infrastructures such as motorways. More recently the impact of ICT infrastructure, and in particular broadband, has received attention. This paper analyses the impact on new business establishments of broadband infrastructure, motorways, airports and railways and a range of other local characteristics such as availability of human capital and access to third level educational facilities. The sample period spans the introduction and recent history of broadband in Ireland, and during this period 86% of the current motorway network was constructed. Human capital, measured as the percentage of the population with a third level qualification and proximity to a third level institution prove to be important determinants of new firm establishments. Availability of broadband infrastructure is significant, but its effects may be mediated by availability of sufficient local human capital. Transport infrastructure access is significant for some sectors. For all sectoral groupings examined, firm establishments seem to favour a more diverse local sectoral mix rather than a concentrated one.