IDEAS home Printed from https://ideas.repec.org/a/spr/anresc/v67y2021i3d10.1007_s00168-021-01059-w.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00168-021-01059-w
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00168-021-01059-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Torsten Persson & Guido Tabellini, 2007. "The growth effect of democracy: Is it heterogenous and how can it be estimated?," Working Papers 322, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    2. Gabriel M. Ahlfeldt & Arne Feddersen, 2010. "From periphery to core: economic adjustments to high speed rail," Working Papers 2010/38, Institut d'Economia de Barcelona (IEB).
    3. Portes, Richard & Rey, Helene, 2005. "The determinants of cross-border equity flows," Journal of International Economics, Elsevier, vol. 65(2), pages 269-296, March.
    4. Dong, Xiaofang & Zheng, Siqi & Kahn, Matthew E., 2020. "The role of transportation speed in facilitating high skilled teamwork across cities," Journal of Urban Economics, Elsevier, vol. 115(C).
    5. Stephen Gibbons & Wenjie Wu, 2017. "Airports, Market Access and Local Economic Performance: Evidence from China," SERC Discussion Papers 0211, Centre for Economic Performance, LSE.
    6. Anjali Adukia & Sam Asher & Paul Novosad, 2020. "Educational Investment Responses to Economic Opportunity: Evidence from Indian Road Construction," American Economic Journal: Applied Economics, American Economic Association, vol. 12(1), pages 348-376, January.
    7. Romain, Astrid & Pottelsberghe de la Potterie, Bruno van, 2003. "The Economic Impact of Venture Capital," IIR Working Paper 03-20, Institute of Innovation Research, Hitotsubashi University.
    8. Dave Donaldson, 2018. "Railroads of the Raj: Estimating the Impact of Transportation Infrastructure," American Economic Review, American Economic Association, vol. 108(4-5), pages 899-934, April.
    9. Ke, Xiao & Chen, Haiqiang & Hong, Yongmiao & Hsiao, Cheng, 2017. "Do China's high-speed-rail projects promote local economy?—New evidence from a panel data approach," China Economic Review, Elsevier, vol. 44(C), pages 203-226.
    10. Vladimir Vladimirovich Kolmakov & Aleksandra Grigorievna Polyakova & Vasily Sergeevich Shalaev, 2015. "An Analysis Of The Impact Of Venture Capital Investment On Economic Growth And Innovation: Evidence From The Usa And Russia," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 60(207), pages 7-38, September.
    11. Yu Qin, 2017. "‘No county left behind?’ The distributional impact of high-speed rail upgrades in China," Journal of Economic Geography, Oxford University Press, vol. 17(3), pages 489-520.
    12. Roger Vickerman, 1997. "High-speed rail in Europe: experience and issues for future development," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(1), pages 21-38.
    13. Sampsa Samila & Olav Sorenson, 2011. "Venture Capital, Entrepreneurship, and Economic Growth," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 338-349, February.
    14. Gilles Duranton & Peter M. Morrow & Matthew A. Turner, 2014. "Roads and Trade: Evidence from the US," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(2), pages 681-724.
    15. Xiaofang Dong & Siqi Zheng & Matthew E. Kahn, 2018. "The Role of Transportation Speed in Facilitating High Skilled Teamwork," NBER Working Papers 24539, National Bureau of Economic Research, Inc.
    16. Zhigang Li & Hangtian Xu, 2018. "High‐speed railroads and economic geography: Evidence from Japan," Journal of Regional Science, Wiley Blackwell, vol. 58(4), pages 705-727, September.
    17. Andrew B. Bernard & Andreas Moxnes & Yukiko U. Saito, 2019. "Production Networks, Geography, and Firm Performance," Journal of Political Economy, University of Chicago Press, vol. 127(2), pages 639-688.
    18. Faria, Ana Paula & Barbosa, Natália, 2014. "Does venture capital really foster innovation?," Economics Letters, Elsevier, vol. 122(2), pages 129-131.
    19. Nathaniel Baum-Snow & Loren Brandt & J. Vernon Henderson & Matthew A. Turner & Qinghua Zhang, 2017. "Roads, Railroads, and Decentralization of Chinese Cities," The Review of Economics and Statistics, MIT Press, vol. 99(3), pages 435-448, July.
    20. Ansgar Belke & Rainer Fehn & Neil Foster, 2003. "Does Venture Capital Investment Spur Employment Growth?," CESifo Working Paper Series 930, CESifo.
    21. Mike Wright, 1998. "Venture Capital and Private Equity: A Review and Synthesis," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 25(5&6), pages 521-570.
    22. Xiongbin Lin & Ian MacLachlan & Ting Ren & Feiyang Sun, 2019. "Quantifying economic effects of transportation investment considering spatiotemporal heterogeneity in China: a spatial panel data model perspective," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(3), pages 437-459, December.
    23. Ansgar Belke & Rainer Fehn & Neil Foster, 2003. "Does Venture Capital Investment Spur Employment Growth?," CESifo Working Paper Series 930, CESifo.
    24. Molly Lipscomb & A. Mushfiq Mobarak & Tania Barham, 2013. "Development Effects of Electrification: Evidence from the Topographic Placement of Hydropower Plants in Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 200-231, April.
    25. Nathaniel Baum-Snow, 2007. "Did Highways Cause Suburbanization?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 775-805.
    26. Pradhan, Rudra P. & Arvin, Mak B. & Nair, Mahendhiran & Bennett, Sara E. & Bahmani, Sahar & Hall, John H., 2018. "Endogenous dynamics between innovation, financial markets, venture capital and economic growth: Evidence from Europe," Journal of Multinational Financial Management, Elsevier, vol. 45(C), pages 15-34.
    27. Volpe Martincus, Christian & Carballo, Jerónimo & Cusolito, Ana, 2017. "Roads, exports and employment: Evidence from a developing country," Journal of Development Economics, Elsevier, vol. 125(C), pages 21-39.
    28. Mike, Ken Wright Robbie, 1998. "Venture Capital and Private Equity: A Review and Synthesis," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 25(5‐6), pages 521-570, June.
    29. Henry Chen & Paul Gompers & Anna Kovner & Josh Lerner, 2010. "Buy Local? The Geography of Venture Capital," NBER Chapters, in: Cities and Entrepreneurship, National Bureau of Economic Research, Inc.
    30. Howard Aldrich & Tiantian Yang, 2014. "How do entrepreneurs know what to do? learning and organizing in new ventures," Journal of Evolutionary Economics, Springer, vol. 24(1), pages 59-82, January.
    31. Xavier Giroud, 2013. "Proximity and Investment: Evidence from Plant-Level Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(2), pages 861-915.
    32. Duan, Liaoliao & Sun, Weizeng & Zheng, Siqi, 2020. "Transportation network and venture capital mobility: An analysis of air travel and high-speed rail in China," Journal of Transport Geography, Elsevier, vol. 88(C).
    33. Gilles Duranton & Matthew A. Turner, 2012. "Urban Growth and Transportation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(4), pages 1407-1440.
    34. Benjamin Faber, 2014. "Trade Integration, Market Size, and Industrialization: Evidence from China's National Trunk Highway System," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(3), pages 1046-1070.
    35. Berger, Thor & Enflo, Kerstin, 2017. "Locomotives of local growth: The short- and long-term impact of railroads in Sweden," Journal of Urban Economics, Elsevier, vol. 98(C), pages 124-138.
    36. Ansgar Belke & Rainer Fehn & Neil Foster, 2003. "Does Venture Capital Investment Spur Employment Growth? - Further Evidence," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 216/2003, Department of Economics, University of Hohenheim, Germany.
    37. Banerjee, Abhijit & Duflo, Esther & Qian, Nancy, 2020. "On the road: Access to transportation infrastructure and economic growth in China," Journal of Development Economics, Elsevier, vol. 145(C).
    38. Pablo Coto-Millán & Vicente Inglada & Belén Rey, 2007. "Effects of network economies in high-speed rail: the Spanish case," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 41(4), pages 911-925, December.
    39. Komei Sasaki & Tadahiro Ohashi & Asao Ando, 1997. "High-speed rail transit impact on regional systems: does the Shinkansen contribute to dispersion?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(1), pages 77-98.
    40. Shai Bernstein & Xavier Giroud & Richard R. Townsend, 2016. "The Impact of Venture Capital Monitoring," Journal of Finance, American Finance Association, vol. 71(4), pages 1591-1622, August.
    41. Dong, Xiaofang, 2018. "High-speed railway and urban sectoral employment in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 603-621.
    42. Rudra P. Pradhan & Rana P. Maradana & Danish B. Zaki & Saurav Dash & Manju Jayakumar, 2016. "Nexus between venture capital and economic growth in European economic area countries: The Granger causality approach," Journal of Developing Areas, Tennessee State University, College of Business, vol. 50(6), pages 1-15, Special I.
    43. Cumming, Douglas & Dai, Na, 2010. "Local bias in venture capital investments," Journal of Empirical Finance, Elsevier, vol. 17(3), pages 362-380, June.
    44. Feng Yu & Faqin Lin & Yihong Tang & Changbiao Zhong, 2019. "High‐speed railway to success? The effects of high‐speed rail connection on regional economic development in China," Journal of Regional Science, Wiley Blackwell, vol. 59(4), pages 723-742, September.
    45. Meng‐Chi Tang & Yih‐Luan Chyi, 2008. "Legal Environments, Venture Capital, And Total Factor Productivity Growth Of Taiwanese Industry," Contemporary Economic Policy, Western Economic Association International, vol. 26(3), pages 468-481, July.
    46. Dongxiao Niu & Weizeng Sun & Siqi Zheng, 2020. "Travel costs, trade, and market segmentation: Evidence from China's high‐speed railway," Papers in Regional Science, Wiley Blackwell, vol. 99(6), pages 1799-1825, December.
    47. Lin, Yatang, 2017. "Travel costs and urban specialization patterns: Evidence from China’s high speed railway system," Journal of Urban Economics, Elsevier, vol. 98(C), pages 98-123.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xuelu Xu & Mingbo Zheng, 2023. "High-speed rail construction and urban innovation disparity in China: the role of internet development," Economic Change and Restructuring, Springer, vol. 56(5), pages 3567-3599, October.
    2. Chen, Qifei & Wang, Meng, 2022. "Opening of high-speed rail and the consumer service industry: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 31-45.
    3. Yu Chen & Yuandi Wang & Shan Chen, 2021. "Are Chinese Executives Rewarded or Penalized by the Operation of High-Speed Railways?," Sustainability, MDPI, vol. 13(21), pages 1-14, October.
    4. Liu, Mengsha & Jiang, Yan & Wei, Xiaokun & Ruan, Qingsong & Lv, Dayong, 2023. "Effect of high-speed rail on entrepreneurial activities: Evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    5. Ruan, Qingsong & Lv, Dayong & Wei, Xiaokun, 2024. "High-speed rail and local government financing cost: Evidence from China," Economic Modelling, Elsevier, vol. 131(C).
    6. Kang, Meiling & Li, Yucheng & Zhao, Zhongkuang & Song, Min & Yi, Jun, 2023. "Travel costs and inter-city collaborative innovation: Evidence of high-speed railway in China," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 286-302.
    7. Xiaoxuan Zhang & John Gibson, 2024. "Local economic effects of connecting to China's high-speed rail network: Evidence from spatial econometric models," Working Papers in Economics 24/03, University of Waikato.
    8. Wu, Xiaokang & Yang, Jijun, 2023. "High-speed railway and patent trade in China," Economic Modelling, Elsevier, vol. 123(C).
    9. Li, He & Lu, Juan & Guo, Feiyu, 2022. "High speed rail and corporate social responsibility performance: Analysis of intra-regional location and inter-regional spillover," Transport Policy, Elsevier, vol. 128(C), pages 65-75.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dongxiao Niu & Weizeng Sun & Siqi Zheng, 2020. "Travel costs, trade, and market segmentation: Evidence from China's high‐speed railway," Papers in Regional Science, Wiley Blackwell, vol. 99(6), pages 1799-1825, December.
    2. Baek, Jisun & Park, WooRam, 2022. "The impact of improved passenger transport system on manufacturing plant productivity," Regional Science and Urban Economics, Elsevier, vol. 96(C).
    3. Yang, Xiaolan & Wang, Rui & Guo, Dongmei & Sun, Weizeng, 2020. "The reconfiguration effect of China's high-speed railway on intercity connection ——A study based on media attention index," Transport Policy, Elsevier, vol. 95(C), pages 47-56.
    4. Ma, Liya & Niu, Dongxiao & Sun, Weizeng, 2021. "Transportation infrastructure and entrepreneurship: Evidence from high-speed railway in China," China Economic Review, Elsevier, vol. 65(C).
    5. Duan, Liaoliao & Sun, Weizeng & Zheng, Siqi, 2020. "Transportation network and venture capital mobility: An analysis of air travel and high-speed rail in China," Journal of Transport Geography, Elsevier, vol. 88(C).
    6. Yatang Lin & Yu Qin & Johan Sulaeman & Jubo Yan & Jialiang Zhang, 2023. "Expanding Footprints: The Impact of Passenger Transportation on Corporate Locations," Review of Finance, European Finance Association, vol. 27(3), pages 1119-1154.
    7. Jingbo Cui & Tianqi Li & Zhenxuan Wang, 2023. "Research collaboration beyond the boundary: Evidence from university patents in China," Journal of Regional Science, Wiley Blackwell, vol. 63(3), pages 674-702, June.
    8. Kuang, Chun & Liu, Zijie & Zhu, Wenyu, 2021. "Need for speed: High-speed rail and firm performance," Journal of Corporate Finance, Elsevier, vol. 66(C).
    9. Hanley, Douglas & Li, Jiancheng & Wu, Mingqin, 2022. "High-speed railways and collaborative innovation," Regional Science and Urban Economics, Elsevier, vol. 93(C).
    10. Chang, Zheng & Zheng, Longfei, 2022. "High-speed rail and the spatial pattern of new firm births: Evidence from China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 155(C), pages 373-386.
    11. Okamoto, Chigusa & Sato, Yasuhiro, 2021. "Impacts of high-speed rail construction on land prices in urban agglomerations: Evidence from Kyushu in Japan," Journal of Asian Economics, Elsevier, vol. 76(C).
    12. Dong, Lei & Du, Rui & Kahn, Matthew & Ratti, Carlo & Zheng, Siqi, 2021. "“Ghost cities” versus boom towns: Do China's high-speed rail new towns thrive?," Regional Science and Urban Economics, Elsevier, vol. 89(C).
    13. Wan, Liyang & Wan, Qian, 2022. "High-speed railway and the intercity transmission of epidemics: Evidence from COVID-19 in China," Economic Modelling, Elsevier, vol. 114(C).
    14. Hayakawa, Kazunobu & Keola, Souknilanh & Sudsawasd, Sasatra & Yamanouchi, Kenta, 2022. "Impacts of an international bridge on households: Evidence from Thailand," Journal of Asian Economics, Elsevier, vol. 83(C).
    15. Dong, Xiaofang, 2018. "High-speed railway and urban sectoral employment in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 603-621.
    16. Yahong Liu & Daisheng Tang & Tao Bu & Xinyuan Wang, 2022. "The spatial employment effect of high-speed railway: quasi-natural experimental evidence from China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(2), pages 333-359, October.
    17. Koster, Hans & Hayakawa, Kazunobu & Thisse, Jacques-François, 2021. "High-speed Rail and the Spatial Distribution of Economic Activity: Evidence from Japan's Shinkansen," CEPR Discussion Papers 15771, C.E.P.R. Discussion Papers.
    18. Ciani, Emanuele & de Blasio, Guido & Poy, Samuele, 2022. "A freeway to prosperity? Evidence from Calabria, South of Italy," Economics of Transportation, Elsevier, vol. 29(C).
    19. He, Guojun & Xie, Yang & Zhang, Bing, 2020. "Expressways, GDP, and the environment: The case of China," Journal of Development Economics, Elsevier, vol. 145(C).
    20. Hanlon, W.Walker & Heblich, Stephan, 2022. "History and urban economics," Regional Science and Urban Economics, Elsevier, vol. 94(C).

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:anresc:v:67:y:2021:i:3:d:10.1007_s00168-021-01059-w. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.