Dynamic trends and regional differences of economic effects of ultra-high-voltage transmission projects

Abstract

This study on the economic effects of ultra-high-voltage (UHV) transmission projects in China provides valuable insights into the dynamic trends and regional differences of UHV transmission projects on county economic growth. By employing quasi-natural experiments and constructing a counterfactual control group, this study overcomes the endogeneity problem associated with UHV transmission project construction. The findings indicate that the construction of UHV transmission projects has indeed promoted the county economic development in China. However, it is observed that the employment and investment effects are significant only in the short term, while long-term economic growth primarily depends on the continuous upgrading of the industrial structure and integrating electricity market. Furthermore, this paper highlights the limited impact of UHV transmission projects on energy-rich areas, which may exacerbate regional development imbalances. It suggests that increasing investment in county's human capital may help stimulate the positive effects of UHV transmission projects in energy-rich areas. Additionally, this research preliminarily confirms that UHV transmission projects can help reduce environmental pollution, but energy-rich areas may face potential trade-offs between economic growth and environmental protection. The policy recommendations derived from the research findings can serve as valuable references for other developing countries aiming to develop transmission infrastructure.