Does high-speed rail connection really promote local economy? Evidence from China’s Yangtze River Delt

Yanyan Gao, Shunfeng Song, Jun Sun, Leizhen Zang

Corresponding authors: Shunfeng Song, email: song@unr.edu

Review of Development Economics, Vol.24, No1, 2019

 

Abstract: High-speed rail (HSR) has led to a transportation revolution in China. This paper uses the county-level panel data of China’s Yangtze River Delta to investigate the effect of HSR connection on local economy. To address the issue of endogenous HSR route placement, we use a straight-line strategy to construct potential HSR connection variables as instrumental variables of the actual HSR connection. Both the difference-in-differences and instrumental variable methods show that HSR connection impedes local economy, especially in peripheral regions. The impediment effect is channeled through population reallocation from peripheral to core areas and the restructuring of industries.

Keywords: difference-in-differences, GDP per capita, high-speed rail, Yangtze River Delta

View full article(PDF)

To link to this article: https://doi.org/10.1111/rode.12642