Agglomeration, housing affordability, and new firm formation: The role of subway network
The housing affordability issue in mega-cities creates a significant job-housing mismatch and undermines productive new business creation. This paper focuses on Beijing and investigates whether improved accessibility via the subway network helps new firms benefit from agglomeration economies and, at...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
Elsevier BV
2020
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| Online Access: | https://hdl.handle.net/1721.1/126890 |
| _version_ | 1826207807106449408 |
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| author | Du, Rui Zheng, Siqi |
| author2 | Massachusetts Institute of Technology. Department of Urban Studies and Planning |
| author_facet | Massachusetts Institute of Technology. Department of Urban Studies and Planning Du, Rui Zheng, Siqi |
| author_sort | Du, Rui |
| collection | MIT |
| description | The housing affordability issue in mega-cities creates a significant job-housing mismatch and undermines productive new business creation. This paper focuses on Beijing and investigates whether improved accessibility via the subway network helps new firms benefit from agglomeration economies and, at the same time, provides workers with easy access the low-cost rental housing. Using commercial rental housing transaction records and dynamic bilateral subway travel time from 2010-2015, we build the measure of the accessibility to business clusters and low-cost rental housing through the subway network at a high spatial resolution. Taking advantage of exogenous shocks from the network reconfiguration due to the rapid subway expansion in Beijing, we employ a matched difference-in-differences estimation in multiple periods to identify the causal elasticity estimate of the new firm formation with respect to the accessibility to business clusters and low-cost rental housing. We demonstrate that the subway network is more conducive to firm establishments. The effects are more salient for firms in skill-intensive sectors. New skill-intensive firms increase by 0.44% given a 1% increase in the accessibility to business clusters. The elasticity of new skill-intensive firms with respect to the accessibility to low-cost rental housing is about 0.74. Our findings that transit-oriented development leads to a higher concentration of new skill-intensive businesses, pointing to the importance of an efficient public transit system capable of serving the dispersed workforce and improving the efficiency of firm location choice. |
| first_indexed | 2024-09-23T13:55:16Z |
| format | Article |
| id | mit-1721.1/126890 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T13:55:16Z |
| publishDate | 2020 |
| publisher | Elsevier BV |
| record_format | dspace |
| spelling | mit-1721.1/1268902022-10-01T18:00:48Z Agglomeration, housing affordability, and new firm formation: The role of subway network Du, Rui Zheng, Siqi Massachusetts Institute of Technology. Department of Urban Studies and Planning The housing affordability issue in mega-cities creates a significant job-housing mismatch and undermines productive new business creation. This paper focuses on Beijing and investigates whether improved accessibility via the subway network helps new firms benefit from agglomeration economies and, at the same time, provides workers with easy access the low-cost rental housing. Using commercial rental housing transaction records and dynamic bilateral subway travel time from 2010-2015, we build the measure of the accessibility to business clusters and low-cost rental housing through the subway network at a high spatial resolution. Taking advantage of exogenous shocks from the network reconfiguration due to the rapid subway expansion in Beijing, we employ a matched difference-in-differences estimation in multiple periods to identify the causal elasticity estimate of the new firm formation with respect to the accessibility to business clusters and low-cost rental housing. We demonstrate that the subway network is more conducive to firm establishments. The effects are more salient for firms in skill-intensive sectors. New skill-intensive firms increase by 0.44% given a 1% increase in the accessibility to business clusters. The elasticity of new skill-intensive firms with respect to the accessibility to low-cost rental housing is about 0.74. Our findings that transit-oriented development leads to a higher concentration of new skill-intensive businesses, pointing to the importance of an efficient public transit system capable of serving the dispersed workforce and improving the efficiency of firm location choice. 2020-09-01T21:56:32Z 2020-09-01T21:56:32Z 2020-06 2019-11 2020-08-31T15:15:37Z Article http://purl.org/eprint/type/JournalArticle 1051-1377 https://hdl.handle.net/1721.1/126890 Du, Rui and Siqi Zheng. "Agglomeration, housing affordability, and new firm formation: The role of subway network." Journal of Housing Economics 48 (June 2020): 101668 © 2020 en http://dx.doi.org/10.1016/j.jhe.2020.101668 Journal of Housing Economics Creative Commons Attribution-NonCommercial-NoDerivs License http://creativecommons.org/licenses/by-nc-nd/4.0/ application/pdf Elsevier BV SSRN |
| spellingShingle | Du, Rui Zheng, Siqi Agglomeration, housing affordability, and new firm formation: The role of subway network |
| title | Agglomeration, housing affordability, and new firm formation: The role of subway network |
| title_full | Agglomeration, housing affordability, and new firm formation: The role of subway network |
| title_fullStr | Agglomeration, housing affordability, and new firm formation: The role of subway network |
| title_full_unstemmed | Agglomeration, housing affordability, and new firm formation: The role of subway network |
| title_short | Agglomeration, housing affordability, and new firm formation: The role of subway network |
| title_sort | agglomeration housing affordability and new firm formation the role of subway network |
| url | https://hdl.handle.net/1721.1/126890 |
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