Highways and Business Location Decisions

Abstract

Local government leaders quite often contend that upgraded highways are important to their communities' economic development potential. This article examines the degree to which investments in high-capacity highways are likely to influence business location decisions, given the mature nature of the interurban highway system in the United States. The authors examine the conceptual relationship between highway investments and facility location, review literature on location factors, and present the findings of surveys of business facility managers in Missouri and Iowa. They conclude that access to a highway generally has become less of a factor in location decisions and discuss the implications of this conclusion for state-level highway investment policy.