High-speed rail network and regional convergence/divergence in industrial structure

Abstract

Despite the large body of literature on the impact of high-speed rail (HSR) on regional economic development, less is known about how it acts as inter-regional linkages. We seek to enrich the literature by examining if HSR can support inter-regional learning and enable lagging regions to learn from advanced ones. Another feature that distinguishes our study from others is its focus on regional convergence/divergence in industrial structure, while most pay attention to that in GDP/incomes. We investigate the impact of HSR connection on the similarity of regional industrial structures during 2008–2015 in China using the multi-stage difference-in-differences and propensity score matching methods. The results suggest that there is a positive relationship between HSR connection and the similarity of a pair of cities’ industrial structures. The influence of HSR connection varies across time, and is contingent on the features of regions and industries. Econometric results show that it takes time for HSR connections to have some effects. Such effects also fade in the long run. Furthermore, HSR development in China has facilitated knowledge flows from developed, coastal regions to lagging, inland regions and then spread among the latter, especially in the case of high-complexity industries. Our research thus provides a more nuanced perspective to better understand the relationship between transport infrastructure and regional convergence/divergence.