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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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    References listed on IDEAS

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    Cited by:

    1. Marius BRÜLHART & Olivier CADOT & Alexander HIMBERT, 2019. "Let There Be Light: Trade and the Development of Border Regions," Working Papers P251, FERDI.
    2. Maurer, Stephan E & Rauch, Ferdinand, 2019. "Economic Geography Aspects of the Panama Canal," CEPR Discussion Papers 13820, C.E.P.R. Discussion Papers.
    3. Ferdinand Rauch & Stephan Maurer, 2019. "Economic Geography Aspects of the Panama Canal," Economics Series Working Papers 875, University of Oxford, Department of Economics.
    4. repec:eee:ecolet:v:178:y:2019:i:c:p:21-23 is not listed on IDEAS
    5. repec:eee:juecon:v:109:y:2019:i:c:p:1-13 is not listed on IDEAS

    More about this item

    JEL classification:

    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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