A Micro-Level Examination of the Impact of Rail Transit Investments on the Patterns of Firm Dynamics

Abstract

Transit-oriented development has been increasingly implemented at stations of both existing and new fixed transit systems across the U.S. to stimulate local economy and create livable communities. A common belief among planners in favor of transit-oriented development is that the provision of passenger rail systems promotes urban development around rail stations. There is a lack of empirical evidence, however, that supports this presumption. To address the gap in relevant literature, this dissertation examines the impact of passenger rail stations on the four different patterns of firm dynamics in the State of Maryland—firm birth and inward relocation as positive impacts, and firm closure and outward relocation as negative impacts. This dissertation uses both standard and propensity-score-weighted negative binomial regression methods to analyze the dependent variables of firm dynamics constructed from the National Establishment Time Series (NETS) panel data of the State of Maryland from 1990 to 2010. By examining both positive and negative impacts of firm dynamics, this dissertation estimates the likelihood of firm retainment and net relocation for areas in proximity of the passenger rail stations, while controlling for a number of potentially confounding factors.

Positive and statistically significant relationships are found between proximity to the passenger rail stations and the rates of firm births and inward relocating firms in Maryland, regardless of differences in the level of maturity of stations. From 1990 to 2010, the areas of passenger rail stations in Maryland experienced a wide range of rates of growth in firm density, depending on the year of station opening. The results of the four different patterns of firm dynamics suggest that areas near passenger rail stations gain belated economic benefits, well after the introduction of rail stations, shown by higher likelihood of firm retainment and net relocation around the mature rail stations opened before 1990. In comparison, areas near the less mature stations that opened after 1990 had predominantly lower likelihood of firm retainment and net firm relocation. Planners and policymakers should be proactive in directing development near rail stations by adopting a variety of measures and policies that support or at least consistent with transit-oriented development.