How does high-speed rail affect off-site investments? Evidence from the Yangtze River Delta, China

This study investigates the influence of high-speed rail (HSR) on off-site investments (OSI) in the context of the Yangtze River Delta (YRD) urban agglomeration. Using a comprehensive dataset of OSI activities between 2008 and 2018, we employ negative binomial regression models to examine the heterogeneous effects of HSR on OSI. Our findings reveal significant positive effects of HSR on OSI in the central region of the YRD, with shorter HSR travel times and higher train frequencies further enhancing these effects. We find that medium-sized enterprises, non-state-owned enterprises, and firms in the producer service industry exhibit greater responsiveness to HSR in terms of OSI. We also observe the coexistence of both siphon and diffusion effects of HSR on OSI in the YRD, with the diffusion effect dominating. This suggests that HSR primarily promotes OSI flows from developed areas to less developed areas, contributing to regional integration and reducing disparities. Lastly, we find that the factor flow (specifically labours and innovations), agglomeration externality, and market potential play significant mediating roles in HSR’s impacts on OSI. Our study contributes to a deeper understanding of the complex relationship between HSR and OSI, providing valuable insights for policymakers in the central region of the YRD and similar regions. We highlight the importance of context-sensitive approaches when coordinating HSR development with other regional policies. And we underscore the need for policymakers to make a balance between short-term and long-lagged-term considerations when maximizing the benefits of HSR.