Transportation infrastructure and capital mobility: evidence from China’s high-speed railways

Liaoliao Duan (), Dongxiao Niu (), Weizeng Sun () and Siqi Zheng ()
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Liaoliao Duan: Tsinghua University
Dongxiao Niu: Tsinghua University
Weizeng Sun: Central University of Finance and Economics
Siqi Zheng: Massachusetts Institute of Technology

The Annals of Regional Science, 2021, vol. 67, issue 3, No 3, 617-648

Abstract: Abstract Using the data on venture capital investment in China and high-speed railway (HSR) construction as a natural experiment, this study presents empirical evidence about the impact of transportation infrastructure on capital mobility. The study finds that one new HSR train serving a city increases venture capital inflow to and outflow from that city by 1.0% and 1.6%, respectively. The heterogeneous analyses indicate that small cities, high-tech industries, and younger firms are significantly affected by HSR connections, which show that the accelerated information transmission and investors’ incremental growth expectations may account for the observed effect.

JEL-codes: G24 R12 R41 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (9)

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DOI: 10.1007/s00168-021-01059-w

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