Access to high-speed rail and land prices in China's peripheral regions

Abstract

This paper examines how transport access affects the land values in peripheral regions, by exploiting the recent expansion of China's high-speed rail (HSR) network. Based on a nation-wide land transaction dataset and applying a DID-hedonic approach, we find that industrial parcels in distant peripheries benefit from the HSR-induced growth spillover, while residential parcels in the immediate vicinity of a high-tier core experience larger price appreciation after HSR connection. Based on comprehensive firm-level datasets, additional tests of the HSR impact on the location choice and performance of firms in peripheral regions show much similar patterns. These findings add to the understanding of the impact of HSR on the spatial distribution of economic activity. By accelerating the growth spillovers from the highly agglomerated urban core to remote peripheries, transport access can play an essential role in reducing spatial inequality. By contrast, peripheries neighboring highly agglomerated urban cores may benefit more from the relocation of residents from urban core, at the expense of a shrinking manufacturing sector due to agglomeration shadow effect.