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Evaluating China's road to prosperity: A new economic geography approach


  • Roberts, Mark
  • Deichmann, Uwe
  • Fingleton, Bernard
  • Shi, Tuo


Over the last two decades, China has embarked on an ambitious program of expressway network expansion. By facilitating market integration, this program aims to promote efficiency at the national level and contribute to the catch-up of lagging inland regions. This paper evaluates the short-run aggregate and spatial economic impacts of network expansion. We adopt a counterfactual approach based on the hybrid estimation–calibration of a structural ‘new economic geography’ model. Overall, we find that aggregate Chinese real income was approximately 6% higher than it would have been in 2007 had the expressway network not been built, although this does not take into account the opportunity costs associated with expenditure on the network. Although there is considerable heterogeneity in the results, we find no significant reduction in disparities across prefectures and no reduction in urban–rural disparities. If anything, the expressway network appears to have reinforced existing patterns of spatial inequality; although, over time, these will likely be reduced by enhanced migration.

Suggested Citation

  • Roberts, Mark & Deichmann, Uwe & Fingleton, Bernard & Shi, Tuo, 2012. "Evaluating China's road to prosperity: A new economic geography approach," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 580-594.
  • Handle: RePEc:eee:regeco:v:42:y:2012:i:4:p:580-594 DOI: 10.1016/j.regsciurbeco.2012.01.003

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    References listed on IDEAS

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    Cited by:

    1. Roberts,Mark, 2016. "Identifying the economic potential of Indian districts," Policy Research Working Paper Series 7623, The World Bank.
    2. Li, Chao & Gibson, John, 2013. "Rising Regional Inequality in China: Fact or Artifact?," World Development, Elsevier, vol. 47(C), pages 16-29.
    3. Winters, L. Alan, 2014. "Globalization, Infrastructure, and Inclusive Growth," ADBI Working Papers 464, Asian Development Bank Institute.
    4. Qin, Yu & Zhang, Xiaobo, 2016. "The Road to Specialization in Agricultural Production: Evidence from Rural China," World Development, Elsevier, vol. 77(C), pages 1-16.
    5. Ejaz Ghani & Arti Grover Goswami & William R. Kerr, 2016. "Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing," Economic Journal, Royal Economic Society, vol. 126(591), pages 317-357, March.
    6. Anderson, Kym & Strutt, Anna, 2014. "Food security policy options for China: Lessons from other countries," Food Policy, Elsevier, vol. 49(P1), pages 50-58.
    7. Bosker,Maarten & Deichmann,Uwe & Roberts,Mark, 2015. "Hukou and highways : the impact of China?s spatial development policies on urbanization and regional inequality," Policy Research Working Paper Series 7350, The World Bank.
    8. Martin Borowiecki & Karl-Heinz Leitner, 2015. "Determinants of new business formation in China: Regional evidence from a panel data model," ERSA conference papers ersa15p598, European Regional Science Association.
    9. World Bank, 2014. "Regional Economic Impact Analysis of High Speed Rail in China : Main Report," World Bank Other Operational Studies 19996, The World Bank.
    10. Roberts,Mark & Melecky,Martin & Bougna,Theophile & Xu,Yan-000462055, 2018. "Transport corridors and their wider economic benefits : a critical review of the literature," Policy Research Working Paper Series 8302, The World Bank.
    11. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2013. "Highway to success in India : the impact of the golden quadrilateral project for the location and performance of manufacturing," Policy Research Working Paper Series 6320, The World Bank.
    12. Taotao Deng & Shuai Shao & Lili Yang & Xueliang Zhang, 2014. "Has the transport-led economic growth effect reached a peak in China? A panel threshold regression approach," Transportation, Springer, vol. 41(3), pages 567-587, May.
    13. repec:bla:jecsur:v:31:y:2017:i:4:p:905-922 is not listed on IDEAS
    14. Holl, Adelheid, 2016. "Highways and productivity in manufacturing firms," Journal of Urban Economics, Elsevier, vol. 93(C), pages 131-151.
    15. John Gibson & Chao Li & Geua Boe-Gibson, 2014. "Economic Growth and Expansion of China’s Urban Land Area: Evidence from Administrative Data and Night Lights, 1993–2012," Sustainability, MDPI, Open Access Journal, vol. 6(11), pages 1-16, November.
    16. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2013. "The golden quadrilateral highway project and urban/rural manufacturing in India," Policy Research Working Paper Series 6620, The World Bank.
    17. Li, Chao & Gibson, John, 2015. "City scale and productivity in China," Economics Letters, Elsevier, vol. 131(C), pages 86-90.
    18. Simon Alder, 2015. "Chinese Roads in India: The Effect of Transport Infrastructure on Economic Development," 2015 Meeting Papers 1447, Society for Economic Dynamics.
    19. Claudia N. Berg & Uwe Deichmann & Yishen Liu & Harris Selod, 2017. "Transport Policies and Development," Journal of Development Studies, Taylor & Francis Journals, vol. 53(4), pages 465-480, April.
    20. Chao Li & John Gibson, 2014. "Agglomeration Economies in China: Locations and Effects," Working Papers in Economics 14/02, University of Waikato.
    21. Yu, Nannan & de Roo, Gert & de Jong, Martin & Storm, Servaas, 2016. "Does the expansion of a motorway network lead to economic agglomeration? Evidence from China," Transport Policy, Elsevier, vol. 45(C), pages 218-227.
    22. John Gibson & Chao Li, 2017. "The Erroneous Use Of China'S Population And Per Capita Data: A Structured Review And Critical Test," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 905-922, September.
    23. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2013. "Highways and Spatial Development," World Bank - Economic Premise, The World Bank, issue 131, pages 1-6, December.
    24. Chao Li & John Gibson, 2016. "Pareto's Law and City Size in China: Diverging Patterns in Land and People," Working Papers in Economics 16/09, University of Waikato.
    25. Ying Jin & Richard Bullock & Wanli Fang, 2013. "Regional Impacts of High Speed Rail in China : Spatial Proximity and Productivity in an Emerging Economy," World Bank Other Operational Studies 19989, The World Bank.

    More about this item


    China; Transport infrastructure; Economic geography;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models


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