High-Speed Railway, Market Access, and Economic Growth

Wei Zou, Liangheng Chen and Junke Xiong
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Wei Zou: Asian Development Bank Institute
Liangheng Chen: Asian Development Bank Institute
Junke Xiong: Asian Development Bank Institute

No 852, ADBI Working Papers from Asian Development Bank Institute

Abstract: We establish a general equilibrium trade model and adopt the “market access” approach to measure the impact of the high-speed railway (HSR) network on the economic growth of 110 of the main prefecture-level cities of the People’s Republic of China, for which we manually collect the pairwise travel distances and railway speeds to calculate market access. The empirical results show that the launch of the HSR exerts significant positive effects on growth. Specifically, a 1% increase in market access leads to an increase in real income of 0.123% (controlling the region fixed effect) or 0.121% (controlling the province fixed effect). Counterfactual econometric analysis indicates that, if all the HSR were removed in 2015, the market access would fall by an average of 76.2% and the aggregate real income would decline by up to 9.4%. The growth effect of the HSR varies across cities, and the HSR has a more prominent impact on services than on manufacturing. The conclusion remains valid after a series of robustness tests.

Keywords: high-speed railway; transport infrastructure; market access; economic growth; PRC (search for similar items in EconPapers)
JEL-codes: F14 R11 R42 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2018-07-20
New Economics Papers: this item is included in nep-cna, nep-geo, nep-tra and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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