The follow-up ripple effects of Railway on Regional economy : -Lillestrøm case study

Abstract

Since the first railway line between Christiania and Eidsvold was put into use in 1854, Norway's economic development has been accompanied by the development of the railway. What is the relation between railway and economy? Is it positive or negative? What is the effect of railway on one specific region’s economy?

With these three questions, a meeting at The Institute of Transport Economics (Transportøkonomisk institutt stiftelsen Norsk senter for samferdselsforskning), TØI, was held. The meeting was with Kjell Werner Johansen (Vice president), Knut Sandberg Eriksen (Forsker II) and Yu Bai (Forsker), the three of whom introduced the current situation of the transportation economics’ research in Norway. Emphasis was placed on the lack of research and literature in this field. TØI has done much research on roads, not on railway. The TØI researchers acknowledged there are a few works on freight trains, which they provided. In the end, the TØI researchers maintained that the field is interesting, and obliged to aid during the research.

This article answers these questions. First, the literature review presents the results of previous research. Railway infrastructure investment has two effects on the economy: Forward-induced effect of railway construction on economic growth and railway construction follow-up ripple effects on economic growth. Second, the “before-after comparison” method is used to analyze the economic change of Lillestrøm due to the construction of Gardermoenbanen. It shows Gardermoenbanen made a positive effect on the regional economy by several aspects: economic growth rate, new established company quality and commuter facility. Third, the conclusion is drawn: railway investment would make a positive effect on regional development and economic growth.