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On the right track? Railroads, industrial development, and distributional effects in historical China

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  • Bo, Shiyu
  • Chen, Ting
  • Liu, Cong
  • Zhou, Yan

Abstract

We present the first quantitative evaluation of the overall impact and distributional effects of railroad access on industrial growth in historical China. Using newly digitized data on railroad expansion and distance to hypothetical railroad networks as instruments, we find that railroad access significantly increased the annual entry of local industrial firms from 1858 to 1936 and industrial output in 1933. However, the effect is highly localized, concentrated in counties within 10 km of railroad lines, and stronger in historical population and transportation centers. Using a causal mediation framework to analyze the textile industry, we find that railroads facilitated firm entry primarily by enhancing market access to manufactured yarn and lowering travel costs for workers and technicians. Further evidence shows that access to railroads promoted technology adoption.

Suggested Citation

  • Bo, Shiyu & Chen, Ting & Liu, Cong & Zhou, Yan, 2026. "On the right track? Railroads, industrial development, and distributional effects in historical China," Journal of Development Economics, Elsevier, vol. 182(C).
    • Handle: RePEc:eee:deveco:v:182:y:2026:i:c:s0304387826001100
    DOI: 10.1016/j.jdeveco.2026.103827
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