On the supply of network infrastructure - Highways and railways in European regions

The relationship between transport infrastructure and regional development is not monocausal. In addition to the causal link between infrastructure and regional development there is also a reverse link from regional development to infrastructure investments. In the present paper we investigate the latter relationship at the interregional level. A number of factors having an impact on infrastructure supply is formulated including regional and interregional demand, construction costs, financing possibilities, regional policies and border effects. An empirical study is carried out for the supply of railways and highways in a set of regions in the EU. It is found that most of these factors indeed have a significant impact on infrastructure supply. No significant result could be found, however, for regional policies. Also, at a broad spatial level, no indications are found that border regions are suffering from a lack of infrastructure supply.