Role of high-speed rail on social fixed assets investments in China

Fan Zhang, Feng Wang, Jinghua Ou and Shujie Yao

Journal of Chinese Economic and Business Studies, 2019, vol. 17, issue 3, 221-244

Abstract: Rapid development of high-speed rail (HSR) in the past decade has a tremendous boosting effect on China’s economy and society. Under the ‘New normal’, HSR provides an important physical space for the steady expansion of the national economy. This paper uses a panel dataset comprising 285 prefecture-level cities in 2010–2016 to establish an investment measurement model and estimate the impact of HSR on social fixed assets investment. It also uses the difference-in-difference and propensity score matching tests to verify the results. Two important findings arise from the empirical analyses: (1) HSR development significantly stimulates China’s social fixed assets investment, foreign direct investment and real estate investment; and (2) HSR investment does not substitute for investments in other industries, instead, it supplements them. These findings provide strong theoretical and empirical support for China’s long-term HSR development strategy.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:taf:jocebs:v:17:y:2019:i:3:p:221-244

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DOI: 10.1080/14765284.2019.1663697

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