Transport accessibility and foreign investment

Foreign investment benefits the economic growth of regions. Little research exists explaining how regional characteristics and policies influence the attractiveness as a target for different types and sources of foreign investment. A novel database is used in this paper to conduct an empirical analysis, applying a Heckman model focusing on the impact of transport accessibility by road, rail, and air. The sample of 54 000 investment projects targeting 1 165 OECD TL3 regions between 2012 and 2019 provides evidence that air transport, facilitating business travel, is a key determinant of regional foreign investment attractiveness. Furthermore, a minimum level of road access is necessary to be considered as an investment target, while railway access supports investments targeting high-value-added industries relying on access to well-educated employees and an efficient movement of knowledge. These findings can help regions design policies fitting their investment objectives and supporting their economic development.