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Transportation infrastructure and entrepreneurship: Evidence from high-speed railway in China

Liya Ma, Dongxiao Niu and Weizeng Sun

China Economic Review, 2021, vol. 65, issue C

Abstract: Using high-speed railway (HSR) construction in China as a quasi-experiment, this paper contributes to the understanding of how transportation infrastructure affects entrepreneurship. On the basis of a difference-in-difference approach, we find that access to an HSR connection leads to an increase in entrepreneurship by approximately 3.5 percentage points (35% of the mean). Mechanism exploration suggests that market potential is the main channel that HSR encourages entrepreneurial activities, which is realized by accelerated information sharing and face-to-face interactions. And the effect is bigger for high-educated families, wealthy families and in large cities.

Keywords: High-speed railway; Entrepreneurship; Market potential; China (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:65:y:2021:i:c:s1043951x20301747

DOI: 10.1016/j.chieco.2020.101577

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China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

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