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Does high‐speed rail connection really promote local economy? Evidence from China’s Yangtze River Delta

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  • Yanyan Gao
  • Shunfeng Song
  • Jun Sun
  • Leizhen Zang

Abstract

High‐speed rail (HSR) has led to a transportation revolution in China. This paper uses the county‐level panel data of China’s Yangtze River Delta to investigate the effect of HSR connection on local economy. To address the issue of endogenous HSR route placement, we use a straight‐line strategy to construct potential HSR connection variables as instrumental variables of the actual HSR connection. Both the difference‐in‐differences and instrumental variable methods show that HSR connection impedes local economy, especially in peripheral regions. The impediment effect is channeled through population reallocation from peripheral to core areas and the restructuring of industries.

Suggested Citation

  • Yanyan Gao & Shunfeng Song & Jun Sun & Leizhen Zang, 2020. "Does high‐speed rail connection really promote local economy? Evidence from China’s Yangtze River Delta," Review of Development Economics, Wiley Blackwell, vol. 24(1), pages 316-338, February.
    • Handle: RePEc:bla:rdevec:v:24:y:2020:i:1:p:316-338
    DOI: 10.1111/rode.12642
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