Transport connectivity and innovation diffusion: Evidence from high-speed railways expansion

Abstract

How does infrastructure within national innovation systems spur innovation diffusion? Using the expansion of high-speed railways (HSR) in China as a quasi-experimental design, we theorize that connection to the HSR networks will facilitate the engagement in technology licensing, one typical example of innovation diffusion, by decreasing information asymmetry and accessing to a large market with complementary technologies. We further clarify potential mechanisms beyond of focal relationship by introducing three boundary conditions. We use 251 city samples in China between 2005 and 2015 to test our theory. We find evidence that cities’ technical licenses have been increased after the connection to the HSR. We also find that such a positive relationship is stronger when a local city has more human capital and greater foreign competition. Our finding contributes to economic geography literature and research on transport infrastructure by shedding new insights on the interplay between HSR and regional knowledge diffusion.