The impact of railway reform on corporate export: The case of China

Cong Wang, Hangjun Yang and Hang Yuan

Transportation Research Part A: Policy and Practice, 2018, vol. 118, issue C, 627-647

Abstract: This study used monthly datasets over the 2004–2006 period collected from the General Administration of Customs, to analyze the reform of the Ministry of Railways (MOR) as an exogenous shock. The difference-in-differences method was applied to investigate the short-term impact of the MOR’s reform on rail exports from China and its underlying mechanisms. The findings suggested that within a short period after the reform, Chinese rail export declined by 10.94%. Moreover, we found that the reform caused marked decreases in the number of export firms and the price of export goods by rail. The near-monopolistic market structure of the Chinese rail transport industry would not change in the short term, and the overhaul of the governance structure of the MOR would induce noticeable trade effects. In addition, the mechanisms underlying the influence of the MOR’s reform followed on from the monopolistic nature of the industry and the extra market transaction costs associated with stringent government-pricing regulations. Accordingly, the Chinese rail transport sector should be further reformed by promoting its marketization and relaxing government-pricing regulations.

Keywords: Railway reform; Corporate export; Governance structure; Market transaction cost; Extensive margin; Intensive margin (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (7)

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DOI: 10.1016/j.tra.2018.10.013

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