Economic effect and its disparity of high speed rail in China: A study of mechanism based on synthesis control method

Abstract

As one of the most important transportation infrastructure between cities, high-speed rail (HSR) not only had a huge economic effect on the cities along the route, but also had a certain effect on the economic disparity between cities. Based on the panel data of 40 prefecture-level cities along the main railway in China from 2001 to 2017, the economic effect of HSR is investigated by synthetic control methods (SCM) in this paper. The results show that HSR had the strongest significant positive economic effect on the city with higher economic development level and speed, had significant negative economic effect on the city that facing a negative economic growth, had insignificant weak positive economic effect on the city with lower economic development level and speed. Thus the economic effect of HSR had strong disparity. In addition, in order to explore the reasons for the economic effect disparity of HSR, this study further analyzed the mechanism of the disparity. It is found that the indirect economic effects (accelerating the flow efficiency of factors of production and changing the distribution of factors of production) brought by HSR had positive economic effects in certain cities, but had negative economic effects in some others. And it was the main reason for the economic effect disparity of HSR. By contrast, the direct economic effects of HSR (promoting the development of traffic consumption and tourism industry) often only had positive economic effects, and showed strong consistency in different cities.