Does High-Speed Rail Promote Enterprises Productivity? Evidence from China

Abstract

High-speed rail (HSR) is often claimed to bring different regions and cities closer together by shortening travel times, which can reduce the costs and increase enterprises productivity to promote a sustainable economy. However, another view argues that HSR transfers economic activities from peripheral cities to core cities, resulting in unbalanced regional economic development and damaging the sustainability of the economy. Based on microdata from China, this paper empirically investigates the impact of HSR on the enterprises productivity in both core cities and peripheral cities and explores the impact mechanism from the perspective of allocation effect and distribution effect caused by HSR. The results show that the connection of HSR positively affects the enterprises productivity in core cities, while it negatively affects the enterprises productivity in peripheral cities, with effect values of 1.38% and -8.45%, respectively. The conclusion still holds after endogenous treatment and multiple robustness tests are conducted. Additionally, the allocation effect analysis shows that the market access caused by HSR has an optimization effect on the resource allocation efficiency of both core cities and peripheral cities. The distribution effect analysis reveals that the distribution of enterprise productivity in peripheral cities has market heterogeneity, regional heterogeneity, and location heterogeneity. The important policy significance of this paper is that, in order to promote the sustainable development of enterprises and the economy, it should reduce policy restrictions and promote the effective flow of capital and talents, carry out the dislocation development of industry for peripheral cities, and “build a nest to attract the phoenix.”

Spillovers across industries and regions in China’s regional economic diversification

“…The recent literature has explored the influence of HSR on accessibility (Fan et al, 2019), labour employment (Lin, 2017), population mobility and agglomeration (Li & Xu, 2018), productivity (Yang et al, 2019), industrial development (Qin, 2017), and more (Chen & Vickerman, 2017; Xie et al, 2020). In fact, the construction of HSR between provinces should be close to random (Qin, 2017), at least with respect to the variable of interest (e.g., industrial similarity among provinces) and to province-level characteristics (Bertrand et al, 2004;Besley & Case, 2000), because HSR construction was largely driven by political considerations (not primarily to connect provinces with similar industrial structures).…”

Intra-City Industrial Collaborative Agglomeration, Inter-City Network Connectivity and Green Technology Innovation

“…Therefore, in the context of China's rapid development of the high-speed railway, this article argues that it is reasonable to build inter-city network connectivity based on high-speed railway. Referring to Zhang [71] and Yang et al [72], market access is applied as an indicator to measure inter-city network connectivity. Essentially, market access reflects the change of trade costs between cities [73], which affects the development of urban economic activities.…”

“…where Access i represents market access of city i; GDP k represents the market size of city k; θ is the annual parameter estimated by the power-decay function using passenger numbers on China's high-speed railways [72]; t ik represents the minimum commuting time between city i and city k. The calculation formula of t ik is as follows:…”

Substantial but heterogeneous impacts of high-speed rail on talent flow in China

“…The reduction in travel time also boosts the development of transportation, tourism, retail trade, and hotel (Dong et al, 2020;Gao et al, 2019b;Lin, 2017). Moreover, HSR is conducive to enhance the capital flow and expand the scale of enterprises (Cui and Li, 2019;Lin et al, 2019;Yang et al, 2019;Zou et al, 2021), resulting in an increase in employment opportunities. HSR is expected to affect labor mobility and redistribution (Yin et al, 2015) for the improvement of accessibility and reduction of commuting time.…”

“…On the other hand, HSR reduces the travel time between core and peripheral cities, which makes it easier for labors to commute between peripheral cities and developed cities (Helpman and Krugman, 1985;Krugman, 1991). Under the siphoning effects (Dong et al, 2021;Gao et al, 2020;Ke et al, 2017;Qin, 2017;Yu et al, 2019), both human capital and production resources migrate from less-developed to developed cities, and thus peripheral cities suffer from the economic downturn, declination in labor productivity, and population loss (Ke et al, 2017;Qin, 2017;Yang et al, 2019), resulting in enlarged economic unbalance between core and periphery.…”