The impact of planning intervention on business development: Evidence from the Netherlands

Abstract

There has been a growing research interest in measuring the impact of planning and land-use regulations on housing market outcomes, but parallel development of the evidence base for the business sector has yet to occur. This article examines the impact of planning intervention on the amount of building investment taking place at sites allocated for industrial and business development. Measures that capture different dimensions of planning intervention are incorporated into models of industrial building investment. The models are estimated using a novel micro dataset on permit activity that covers a sample of industrial and business sites in the Netherlands. The results provide evidence of some of the expected negative effects of the regulatory role of planning intervention, but also show that proactive, targeted planning policies exert a significant and positive influence on investment activity. Specifically, policy-induced improvements to the physical environment will stimulate both new construction and refurbishment activity.