Transportation Infrastructure and Innovation: Evidence from China’s High-Speed Railways

Xiao Zhang () and Tiantian Cui
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Xiao Zhang: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China
Tiantian Cui: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China

Sustainability, 2025, vol. 17, issue 22, 1-20

Abstract: Within the innovation-driven development paradigm, transportation infrastructure is playing an increasingly prominent role in shaping innovative activity. This paper examines the impact of transportation infrastructure on firm innovation by exploiting the staggered expansion of China’s High-Speed Rail (HSR) network as a quasi-natural experiment. Using a difference-in-differences framework, we show that the introduction of HSR significantly increases firms’ patenting activity, and the effect remains robust across a battery of alternative specifications and checks. Mechanism analyses suggest that HSR alleviates financing constraints, facilitates the mobility of highly skilled workers, and enhances the efficiency of industry-level resource allocation, thereby fostering firm innovation. Heterogeneity analyses reveal that the effect is most pronounced among firms with stronger R&D capacity, located farther from banks, non-state-owned enterprises, and SMEs. Finally, we document that the innovation-enhancing effect of HSR translates into higher firm competitiveness and profitability, underscoring the broader economic implications of transportation infrastructure development. This study deepens understanding of the mechanisms through which transportation infrastructure shapes innovation and offers important implications for optimizing the HSR network and enhancing the efficiency of innovation resource allocation. These findings offer valuable insights into how enhancing transportation infrastructure can drive firm innovation, boost corporate competitiveness, and contribute to the coordinated and sustainable development of regional economies.

Keywords: high-speed rail; financing constraints; skilled labor mobility; resource allocation efficiency; innovation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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