Did high-speed rail induce regional convergence in China

Shengnan Dai and Charles R. Link

Economic Analysis and Policy, 2025, vol. 86, issue C, 2222-2232

Abstract: China has the longest track length and the most active high-speed rail (HSR) network globally, which is still rapidly expanding. As an emerging transportation infrastructure, HSR offers a new travel option that significantly reduces both cost and travel time between cities. Drawing on neoclassical theory, the introduction of HSR may influence regions in China differentially, thereby reshaping the economies and reducing regional disparities. This study examines the impact of HSR on regional disparities in wages and economic development levels across regions in China. A difference-in-differences (DiD) model is employed to address the non-random placement of HSR stations and estimate the HSR effects on inequalities. To accommodate the potential time lag in the HSR effect, one- and two-year lags are incorporated into the analysis. Utilizing panel data from over 200 cities spanning from 2002 to 2016, our analysis reveals that HSR services benefit the nation by reducing GDP per capita inequality across regions. Additionally, HSR services have played a crucial role in narrowing the wage disparities between the eastern and central regions.

Keywords: High-speed rail; Regional income convergence; Regional wage convergence; Difference-in-differences mod (search for similar items in EconPapers)
JEL-codes: L92 O18 R11 R41 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:86:y:2025:i:c:p:2222-2232

DOI: 10.1016/j.eap.2025.05.046

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