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Highways and Development in the Peripheral Regions of China


  • Xu, Hangtian
  • Nakajima, Kentaro


This paper estimates the effects of highways (Gaosu Gonglu) on economic development in China’s county-level cities from 1998 to 2007, a period in which China experienced sharp growth in highway mileage, using a micro level data set on industry and highway placement and the double difference propensity score matching method. After extracting the core regions, empirical estimates indicate that highway placement promotes industrial development in related cities with higher output and more investments, and these results are robust to two different checks. However, county-level cities more than 300 km away from large cities do not benefit from new highways. Furthermore, highways tend to promote the development of heavy industry but not that of light industry. Labor productivity exhibits few positive effects.

Suggested Citation

  • Xu, Hangtian & Nakajima, Kentaro, 2013. "Highways and Development in the Peripheral Regions of China," PRIMCED Discussion Paper Series 33, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:primdp:33

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    References listed on IDEAS

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    More about this item


    transport infrastructure project; double di erence propensity score matching (DD-PSM); regional development;

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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