Empirical Analysis for Impact of High-Speed Rail Construction on Interregional Dependency

Abstract

The opening of the high-speed rail (HSR) resulted in significant changes in the transportation network of Korea. The new HSR construction was expected to become a new engine of local economic growth. However, there was a controversy regarding whether the connection between regions intensifies the concentration of socio-economic activities in the metropolis (straw effect) or contributes to the balance of regional development (sprawl effect). More increasing attention had been devoted to studying the “straw effects” caused by the newly built HSR networks on interregional social-economic activities. Despite considerable research on the benefit achieved from HSR construction, little has focused on the negative externalities resulting from it. This paper examined the potential “straw effects” of two new HSR lines through constructing the indicator of interregional dependency that measured one city’s level of dependency on another one. In order to exclude the interference of lurking variables, five metropolitan cities were selected as case studies. The empirical results, based on a panel data model, revealed that the larger the economic scale of the target city, the lower the level of dependency on other cities, and there existed a “straw effect” on HSR development in terms of Seoul.