We render operational the model outlined by Carter (1990) via the introduction of the research methods necessary for studying the spatial and sectoral (upstream and downstream) benefits of productivity-enhancing innovations within a real interregional input–output framework. As case study we examine the reduction in production costs derived from the adoption of longer and heavier vehicles in freight road transportation. We exploit a new Spanish regional table including a detailed disaggregation of the transportation sector. The productivity gains at the national level, resulting from a 30% reduction in transport costs, amount to 2.95% of the GVA at market prices. Results show that firms operating in this niche market appropriate most of the gross operation surplus (which increases by 10%), consistent with the existence of market power. The remaining transportation sectors see profits slightly worsened, suggesting limited substitution effects. A high regional heterogeneity exists because of the different input–output structures.
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