Assessing the impact of the Central Line Project of South-to-North Water Diversion on urban economic resilience: Evidence from prefecture-level cities in Henan and Hebei provinces

Xin Guo

International Review of Economics & Finance, 2025, vol. 98, issue C

Abstract: The rational distribution of water resources is vital for the stable development of regional economies. In the agriculturally and industrially advanced cities in the north, water shortages impede agricultural irrigation and industrial production and undermine the stability and resilience of the entire economic system. Consequently, this study utilizes the Difference-in-differences and mediation effect models. It is grounded in a panel data analysis of prefecture-level cities in Henan and Hebei provinces along the Central Line Project of South-to-North Water Diversion from 2010 to 2022. The study aims to analyze the impact of the project's operation and water supply on the economic resilience of the recipient cities and to explore the underlying mechanisms. The research findings are as follows: Firstly, there is a significantly positive correlation between the water supply from Central Line Project of South-to-North Water Diversion and the economic resilience of the recipient cities. This conclusion remains valid after a series of robustness tests. Secondly, the water supply from the Central Line Project of South-to-North Water Diversion's recipient cities' economic resilience by enhancing regional innovation capabilities and agricultural technological innovation. Thirdly, the heterogeneity analysis indicates that the positive impact of the water supply from the Central Line Project of South-to-North Water Diversion on the economic resilience of recipient cities is particularly pronounced in non-resource-based cities, and samples that are adjacent to Beijing and Tianjin or are provincial capitals themselves, or are close to provincial capitals. The research conclusions offer specific references and perspectives for the high-quality development of China's Central Line Project of South-to-North Water Diversion, the optimization of the rational allocation of water resources, and the promotion of stable urban economic growth and enhanced resilience.

Keywords: The central line project of south-to-north water diversion; High-quality development; Urban economic resilience; Difference-in-differences model (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:98:y:2025:i:c:s105905602500067x

DOI: 10.1016/j.iref.2025.103904

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