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Does Investment in National Highways Help or Hurt Hinterland City Growth?

Author

Listed:
  • Nathaniel Baum-Snow
  • J. Vernon Henderson
  • Matthew A. Turner
  • Qinghua Zhang
  • Loren Brandt

Abstract

We investigate the effects of the recently constructed Chinese national highway system on local economic outcomes. On average, roads that improve access to local markets have small or negative effects on prefecture economic activity and population. However, these averages mask a distinct pattern of winners and losers. With better regional highways, economic output and population increase in regional primates at the expense of hinterland prefectures. Highways also affect patterns of specialization. With better regional highways, regional primates specialize more in manufacturing and services, while peripheral areas lose manufacturing but gain in agriculture. Better access to international ports promotes greater population, GDP, and private sector wages on average, effects that are probably larger in hinterland than primate prefectures. An important policy implication is that investing in local transport infrastructure to promote growth of hinterland prefectures has the opposite effect, causing them to specialize more in agriculture and lose economic activity.

Suggested Citation

  • Nathaniel Baum-Snow & J. Vernon Henderson & Matthew A. Turner & Qinghua Zhang & Loren Brandt, 2018. "Does Investment in National Highways Help or Hurt Hinterland City Growth?," NBER Working Papers 24596, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:24596
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    Cited by:

    1. Richard Bluhm & Axel Dreher & Andreas Fuchs & Bradley C. Parks & Austin M. Strange & Michael J. Tierney, 2020. "Connective Financing - Chinese Infrastructure Projects and the Diffusion of Economic Activity in Developing Countries," CESifo Working Paper Series 8344, CESifo.
    2. Mark Roberts & Martin Melecky & Théophile Bougna & Yan (Sarah) Xu, 2020. "Transport corridors and their wider economic benefits: A quantitative review of the literature," Journal of Regional Science, Wiley Blackwell, vol. 60(2), pages 207-248, March.
    3. Marius Brulhart & Olivier cadot & Alexander Himbert, 2019. "Let There Be Light: Trade and the Development of Border Regions," Cahiers de Recherches Economiques du Département d'économie 19.02, Université de Lausanne, Faculté des HEC, Département d’économie.
    4. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    5. 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.
    6. Stephan E. Maurer & Ferdinand Rauch, 2019. "Economic Geography Aspects of the Panama Canal," CEP Discussion Papers dp1633, Centre for Economic Performance, LSE.
    7. Derrick Choe & Alexander Oettl & Rob Seamans, 2020. "What’s Driving Entrepreneurship and Innovation in the Transport Sector?," NBER Chapters, in: The Role of Innovation and Entrepreneurship in Economic Growth, National Bureau of Economic Research, Inc.
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    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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