Opening of high-speed rail and the consumer service industry: Evidence from China

Abstract

This paper studies the impact of high-speed rail (HSR) on the consumer service industry. Using data from 291 prefecture-level cities in China for the 2003–2019 period, we show the following: First, the opening of high-speed rail causes a 8.38% increase in consumer service employment. Second, it is found that the promotion effect of high-speed rail on the consumer service industry is mainly reflected in three industries: the wholesale and retail industry; the accommodation and catering industry; the culture, sports and entertainment industry. Third, we find that the city heterogeneity in the effect of HSR. The opening of HSR increases employment within the large cities’ consumer services sectors. Our findings demonstrate that transportation infrastructure has an obvious employment effect, which will not only affect the tradable sector but also promotes the growth of the non-tradable sector.