Bridging the gap: Assessing the effects of railway infrastructure investments in Northwest China

Lamont Bo Yu, Trang Tran and Wang-Sheng Lee

China Economic Review, 2023, vol. 82, issue C

Abstract: This paper investigates the economic effects of the opening of the only high-speed rail (HSR) line in northwest China, which connects the northwestern provinces along the Silk Road land route. Northwest China faces two major geographical challenges for economic development: its landlocked location and rugged terrain. To assess the impact of the HSR line on economic activity in counties along this Silk Road land route, we utilise a recently developed machine-learning extended nightlight dataset spanning from 2000 to 2019. For this analysis, we employ the ridge augmented synthetic control method (Ben-Michael et al., 2021). Additionally, we propose an algorithm that automates the donor pool selection process while ensuring optimal pre-treatment comparability. Our findings demonstrate that the opening of the Lanzhou-Xinjiang HSR line resulted in both winners and losers. While there are indications that HSR contributes to progress towards breaking through the Hu Huanyong Line, a geographical demarcation in China that is of vast economic significance, not all counties benefited from the opening of the HSR line.

Keywords: High-speed railway; Augmented synthetic control; Hu Huanyong Line; Nighttime light; Place-based policy (search for similar items in EconPapers)
JEL-codes: O22 R11 R58 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:82:y:2023:i:c:s1043951x2300161x

DOI: 10.1016/j.chieco.2023.102076

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