Transport Infrastructure, Intra-Regional Inequality and Urban-Rural Divide: Evidence From China’s High-Speed Rail Construction

Abstract

While the impact of transport infrastructure on regional disparity has been widely examined, its effect on intra-regional inequality has received less attention. Based on panel data at China’s prefecture-city level during 2007–2018, we adopt the Difference-in-Differences model to investigate whether high-speed rail affects one type of intra-regional inequality, the urban-rural income gap. The results show that high-speed rail operation has widened the urban-rural income gap by boosting the agglomeration of population, financial capital, and economic activities in urban areas adjacent to high-speed rail stations. Furthermore, the effect varies across cities. The impact of high-speed rail on the urban-rural income gap is more evident in small and less developed cities due to the polarization effect. In contrast, this is not observed in large and developed cities. One possible reason is that, in the latter, the diffusion effect is much stronger.