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Highways, Market Access and Urban Growth in China

Nathaniel Baum-Snow (), Loren Brandt (), J. Vernon Henderson (), Matthew Turner () and Qinghua Zhang

SERC Discussion Papers from Centre for Economic Performance, LSE

Abstract: We investigate the effects of the construction of the national highway system in China on local economic outcomes. The analysis employs three main approaches. The first is based on a structural model of Ricardian trade that provides an explicit description of the general equilibrium effects of changes in the highway network. The second involves reduced form estimates of the casual effects highways, which accommodates the non-random assignment of highways across locations. The third approach is a hybrid of the first two. Technique matters. The structural model suggests that access to domestic markets, but not to export markets, increases economic output. The reduced form estimates suggest the opposite conclusion and also point to the importance of highways in the rise of regional primate cities. These reduced form findings are consistent with export driven growth policies and central or provincial government policies favouring regional primate cities. In addition to informing policy, our results raise concerns about the use of quantitative results from Ricardian trade models in isolation for understanding how and the extent to which infrastructure drives regional growth.

Keywords: construction; China; Ricardian trade models (search for similar items in EconPapers)
JEL-codes: F10 N65 (search for similar items in EconPapers)
Date: 2016-06
New Economics Papers: this item is included in nep-cna, nep-geo, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21) Track citations by RSS feed

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