Does high-speed railway strengthen the ties among nearby regions? Evidence from China
The High-Speed Railway (HSR) has been widely rolled out in China. It has redefined inter-region connections by greatly reducing the travel time. Using data for China's 288 prefectures from 2003 to 2018, this paper examines the impacts of China's HSR system on Marshall's three micro foundations of agglomeration – labor market pooling, input sharing and knowledge spillover. The baseline model adopts a staggered difference-in-difference approach. In order to test the validity of the parallel assumption and deal with the sequential timing of HSR construction, this article conducted an event-study analysis, which compares the growth trends pre- and post- HSR operation. Finally, a propensity score analysis is conducted to reduce the concern about the endogeneity of route placement. Results show that HSR has increased passenger traffic by train and invention-type patent filings. However, the HSR has reduced rail freight shipping, which suggests a potential crowding-out effect of HSR constructions.
