Abstract | The investment of transport infrastructure has long been considered one of the key factors in promoting economic growth. The transport infrastructure mainly affects the economy through both the direct effect and the indirect effect, the former refers to taking transport infrastructure as investment goods, while the latter regards it as quasi-public goods externally. The construction of high-speed railway is an important part of China’s infrastructure construction in the past decade. The mileage of high-speed railway has reached 19,000 km by the end of 2015, and will double and reach 38,000 km by 2025. Then there would have constructed the high-speed rail network which quickly connects the regions and cities.
The opening of high-speed railway has significant impact on China’s economic development, but does the opening of the high-speed railway promote the regional economic growth from the positive spillover effect, or does the economic condition becomes worse due to the siphon effect? Many of the existing researches use difference in difference or spatial econometric methods to examine the high-speed rail’s impact on the economy by selecting some of the high-speed rail lines, but there are few to study the causal effect of high-speed rail opening comprehensively. This paper sets up a general equilibrium trade model, and derives a reduced form expression for the impact of transport infrastructure on income—market access, which is the sum over trading partners’ income, discounted by the bilateral trade costs and by the market access of the trading partners. Market access captures the direct and indirect impacts on each city from changes in transport infrastructure, then accurately measures the impact of changes in transportation infrastructure on economic growth. The advantage of estimating the impact of market access, rather than estimating the impact of local railroad density, is that it covers the full effect of railway network, and the market access of each region or city is influenced by changes elsewhere in the railroad network. The model predicts a log-linear relationship between income and market access, which provides useful guidance for the estimating equation of empirical analysis.
This paper adopts the market access approach to investigate the aggregate effects of high-speed railway opening on economic growth based on China’s city-level panel data from 2006 to 2015. The main findings are: the high-speed rail opening has a positive impact on economic growth, and 1% increase in market access is associated with a 0.123(control regional fixed effect) or 0.121(control provincial fixed effect) percentage increase in real income; using counterfactual econometrics, we measure the aggregate and distributional consequences of high-speed rail on economy, and find that if removing all high-speed rail in 2015, the real income is estimated to decrease by 9.4%, but the distribution effect of high-speed rail is not consistent in different regions. Furthermore, investigating the impact of high-speed rail on secondary and tertiary industries, we find the tertiary industries turn out more sensitive to high speed rail opening.
Therefore, the government should further accelerate the construction of high speed rail to promote economic growth; In the meantime, high-speed rail construction in different regions should be targeting differently to reduce regional differences. In addition, the government should pay attention to the combination of different modes of transport, so as to obtain the optimal transportation cost and maximize the externalities to promote economic growth.
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