Straw effects of new highway construction on local population and employment growth

Growing concern surrounding the existence of 'straw effects' is evident in recent studies that reveal how new road network accessibility negatively causes lower economic productivity in lagging areas by increasing the level of local dependency on major metropolitan areas. This paper examined the potential 'straw effects' of two new highways, the Central Inland Highway and Seoul-Chuncheon Highway, on regional population and industry growth in Korea using Difference-In-Differences (DID) analysis, including specific analysis of lagged areas of the Central Inland region. The findings revealed that there is no evidence of the 'straw effects' and that it is not only the newly built highways that contribute to increasing local population and employment in lagging areas but also existing highway accessibility.