The Impact of high-speed rail on local economic activities

Abstract

China’s rapid and successful development of HSR network provides a sound empirical setting to analyze the effect of transport infrastructure on regional development. Did the HSR promote local economic activities in the areas near HSR stations? This study aims to empirically examine the changes in economic activities associated with the introduction of the Wuhan-Guangzhou HSR line on December 26th, 2009. For analysis, this study uses nighttime lights data from the U.S. National Oceanic and Atmospheric Administration (NOAA) to proxy for local economic activities and construct an 8-year panel dataset at the township level. Using a differences-in-differences approach, the study finds that on average, townships near HSR stations have seen an increase in economic activities by 9% four years after the launch of the HSR. A series of robustness checks confirms the main result.