High speed rail and urban service industry agglomeration: Evidence from China's Yangtze River Delta region

Abstract

High speed rail (HSR) services shorten space-time distances between cities and induce the reallocation of production resources between regions (cities). Based on the data of 25 cities in China's Yangtze River Delta region during 1995–2014, this paper uses the (continuous) difference-in-differences model to investigate the influence of HSR on urban service industry agglomeration. The results show that HSR has a positive effect on the urban service industry agglomeration of the cities located along the rail lines. Compared with cities not located along the rail lines, HSR does not weaken the service industry agglomeration of the medium and small-sized cities that are also situated along the rail lines and around the core city. The service intensity of HSR, which is measured by train service frequency, also exhibits a significant effect on the service industry agglomeration of those cities located along the rail lines. Higher levels of HSR service intensity have a greater effect on urban service industry agglomeration. In addition, we further subdivide the category of service industry into producer service, consumer service, and public service industries. We find that HSR has a significant impact on producer service industry agglomeration, but HSR's influences on consumer service industry and public service industry are insignificant.