Highways, railways and entrepreneurship in peripheral cities: evidence from China

Abstract

Peripheral cities are more susceptible to transportation infrastructure than core cities in terms of entrepreneurial activities. We use market access approach to estimate the impacts of highways and high-speed railways on entrepreneurship in the small and medium-sized cities in China under knowledge spillover entrepreneurship framework. The results show that the increased market potential caused by highways and high-speed railways significantly improves the entrepreneurial performance of peripheral cities. The entrepreneurship effects of highways are stronger than high-speed railways, especially for these cities that are relatively closer to core cities. On the contrary, the entrepreneurship effects of high-speed railways are stronger in these cities that are far from core cities. This study suggests that transportation infrastructure plays an important role in entrepreneurship, and there is a complementary effect between highways and high-speed railways.