Influence from highways on regional economic growth – based on the trade potential in China

Abstract

The question of whether the construction of the highway network is economical and can produce positive economic benefits has been a hot topic of discussion in recent years. Previous scholars have explored the impact from multiple perspectives. Our paper draws the “trade potential” model proposed by Armstrong, based on the universal gravity model and the principle of space interaction, which is different from the traffic accessibility, market potential, and market access used in most of the literature. We argue that it is more appropriate to consider both the size impact and the time distance or trade cost impact of the two cities. The paper constructs a conceptual framework and theoretical model for the impact of highways on regional economic growth, measures the “minimum transit time” of highways between prefecture-level cities in China, and calculates the trade potential of prefecture-level cities. Through corresponding empirical model testing, we have obtained some meaningful conclusions.