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Transportation infrastructure and capital mobility: evidence from China’s high-speed railways

Author

Listed:
  • Liaoliao Duan

    (Tsinghua University)

  • Dongxiao Niu

    (Tsinghua University
    Massachusetts Institute of Technology)

  • Weizeng Sun

    (Central University of Finance and Economics)

  • Siqi Zheng

    (Massachusetts Institute of Technology)

Abstract

Using the data on venture capital investment in China and high-speed railway (HSR) construction as a natural experiment, this study presents empirical evidence about the impact of transportation infrastructure on capital mobility. The study finds that one new HSR train serving a city increases venture capital inflow to and outflow from that city by 1.0% and 1.6%, respectively. The heterogeneous analyses indicate that small cities, high-tech industries, and younger firms are significantly affected by HSR connections, which show that the accelerated information transmission and investors’ incremental growth expectations may account for the observed effect.

Suggested Citation

  • Liaoliao Duan & Dongxiao Niu & Weizeng Sun & Siqi Zheng, 2021. "Transportation infrastructure and capital mobility: evidence from China’s high-speed railways," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(3), pages 617-648, December.
    • Handle: RePEc:spr:anresc:v:67:y:2021:i:3:d:10.1007_s00168-021-01059-w
    DOI: 10.1007/s00168-021-01059-w
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    More about this item

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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