High-speed Rail Investment Research Articles

The Impact of China’s High-speed Rail Overseas Investment on Economic Growth of the Belt and Road Countries

Formally proposed in 2009, China's high-speed rail ‘go global’ was effectively promoted in 2013 with the proposal of the Belt and Road Initiative (BRI), which expanded China's high-speed rail overseas investment to a global scale. Studying the impact of China's high-speed rail (HSR) investment overseas is of great significance for the continuous promotion of BRI. Based on the panel data of 46 countries along the Belt and Road from 2006 to 2021, the difference-in-difference method (DID) is used to evaluate the impact of China's HSR overseas investment on the economic growth of corresponding countries. Besides, heterogeneity analysis in terms of region is carried out in this paper. The empirical results show that, first, China's overseas investment in HSR promotes the economic growth of the countries along the Belt and Road, and this conclusion is confirmed by the parallel trend test. Second, compared with other regions, China's HSR investment has a more obvious positive effect on the economic growth of Asian countries.

Can rural counties benefit from high-speed rail investments? The distributive economic impacts of constructing the Dallas-Houston line

High-speed rail (HSR) investments have demonstrated significant economic benefits in many regions around the world. However, there have been ongoing concerns over the potential unjust effects of HSR development on the rural areas where HSR routes traverse. In the United States, resistance from rural landowners is a major factor that has delayed or derailed numerous HSR projects. Understanding whether and how rural areas may or may not benefit from HSR investments helps facilitate timely project delivery and inform supplementary policymaking to achieve broader societal benefits. This paper presents a case study of the Dallas – Houston HSR line in Texas, USA, a proposed project with private investments totaling $16 billion from Texas Central Railroad, LLC. Applying Multi-Regional Input-Output (MRIO) modeling, the study estimates the economic impacts of investing in the Dallas-Houston HSR line and examines the spatial and sectoral distributions of the impacts across the rural counties along the project alignment. The privately funded Dallas – Houston HSR project stalled after a decade-long effort, largely due to opposition from the rural counties along the line. The recent formation of the Amtrak-Texas Central partnership has brought back hope to revive the HSR proposal. The findings of this study are informative for Amtrak-Texas Central to develop strategies that address the unbalanced rural–urban impacts of constructing the HSR line for ultimate project success.

Impact of high-speed rail on the mismatch of labor and industry allocations: Evidence from Chinese cities in 2000-2019

The uneven development of China can be reflected by the mismatch of labor and industry distributions (MLIS) in terms of spatial structure. Industries usually agglomerate in large cities where a strict household registration system causing high barriers with respect to population and labor entry. Infrastructures that reduce the cost of labor and technology mobility, as represented by high-speed rail (HSR), are possible improvement to regulate such distortions as the two agglomerated into opposite directions. This paper focuses on the impact of HSR on MLIS using a large panel dataset comprising 285 Chinese cities in 2000–2019. A difference-in-difference analysis is introduced to carried out empirical analyses. This paper finds that HSR can significantly mitigate the MLIS in prefecture level cities, but not in cities above prefecture level. The heterogeneous effects of HSR are then discussed with respect to industries and MLIS types. Further mechanism tests show that HSR’s mitigating effect on MLIS comes from the employment effect and the innovation effect. Finally, policy recommendations are provided on HSR investment to improve China's uneven development from the perspective of synergy labor and industry distributions.

Access to capital and energy efficiency: How high-speed rail investments benefit high-tech firms

This study examines how high-speed rail network impacts the energy consumption of hi-tech firms along the line. The results show that the opening of high-speed railway stations in a county leads to reduction in energy consumption by hi-tech firms in the county. This effect is stronger with increased density of railway lines in the region. The study identifies two key mechanisms underlying this effect: enhanced financing access and increased overseas outreach. Our findings reveal that improved financing access to public market capital, bank loans, and venture financing enables hi-tech firms to invest in international outreach activities. We also conduct additional analysis to explore nuanced conditions regarding the types of hi-tech firms that benefit the most from being located in a high-speed rail city. Contributions to the emerging field of corporate energy saving are discussed.

High-speed rail construction and labor investment efficiency: Evidence from an emerging market

This study investigates the association between high-speed rail (HSR) construction and labor investment efficiency. Using unique hand-collected data on HSR construction over the period 2008–2019, we find that HSR construction can significantly decrease inefficient labor investment in China. In addition, we find that this negative relationship is (a) strong in state-owned companies and in firms located in big cities and (b) weak in financially constrained firms and in firms located in areas with a strong religious atmosphere. Consistent with the theoretical prediction, we find that the HSR construction mitigates inefficient labor investment by reducing information asymmetry between managers and investors and enhancing labor mobility. Overall, our findings are robust to alternative measurements, additional controls, fixed effects, and endogeneity concerns. Our findings have implications for firms’ top management to make strategic decisions and for government’s bodies/policymakers in relevance to HSR investment decisions.

The impact of China's high-speed rail investment on regional economy and air pollution emissions

The high-speed rail (HSR) network in China has experienced rapid development since the 2000s. In 2016, the State Council of the People's Republic of China issued a revised version of the “Mid- and Long-term Railway Network Plan”, detailing the expansion of the railway network and construction of an HSR system. In the future, the HSR construction efforts in China will further increase, which is considered to impact regional development and air pollutant emissions. Therefore, in this paper, we apply a transportation network-multiregional computable general equilibrium (CGE) model to estimate the dynamic effects of HSR projects on economic growth, regional disparities, and air pollutant emissions in China. The results indicate that HSR system improvement could generate a positive economic impact but could also increase emissions. The gross domestic product (GDP) growth per unit investment cost stimulated by HSR investment is found to be the largest in eastern China but the smallest in the northwest regions. Conversely, HSR investment in Northwest China contributes to a substantial reduction in regional disparities in terms of the GDP per capita. In regard to air pollution emissions, HSR construction in South-Central China results in the largest increase in CO2 and NOX emissions, while for CO, SO2, and fine particulate matter (PM2.5) emissions, the largest increase occurs due to HSR construction in Northwest China. At the regional level, the provinces with large changes in accessibility also experience large changes in their air pollutant emissions.

Socioeconomic Impacts of high-speed rail: A bibliometric analysis

High-speed rail (HSR), as an efficient and environmentally sustainable mode of transportation mode, has received increasing attention in many countries over the past decades. While the literature on HSR's technology development and the assessment of the socioeconomic impact of the system has increased substantially in recent years, it remains unclear how the understanding of the socioeconomic impact system has evolved, and what the characteristics of various research focuses are. The objective of this study is to provide a comprehensive examination of the evolution of the high-speed rail literature, with a focus on socioeconomic impact analysis. Specifically, the following research questions are addressed: what is the global trend of scientific publication on the socioeconomic impact analysis of HSR? What specific focuses are uncovered from this trend? And what are the future directions of research in this field? A thorough understanding of the literature helps scholars better identify the research gaps, needs and directions for future research endeavors. In addition, it may also facilitate the decision-making for future investment in HSR through a better understanding of the potential impacts of the system.

Understanding the formation of City-HSR network: A case study of Yangtze River Delta, China

As an essential transportation infrastructure, high-speed rail (HSR) plays an important role in improving connections and economic efficiency among cities which has been proved by numerous studies. In turn, the cities’ economic development levels also influence the planning and construction of HSR. Several qualitative studies pointed out that some failed projects of HSR investment were attributed by the neglect of urban economic factors. However, there lacks a quantitative understanding of which specific city economic factors influence the formation of HSR networks and to what extent. This study intends to answer the questions by analyzing the formation process of HSR network under the influence of city economic development using a generative network model (GNM) and social network analysis. It focused on 20 cities in the Yangtze River Delta region of China and constructed a City-HSR network that coupled the city economic network and HSR network. Then, a GNM method considering transitivity, distance, boundary effect, and population, was used to generate simulated networks similar to the City-HSR network. The similarities in network metrics between the City-HSR network and the GNM networks were compared by the quadratic assignment procedure (QAP) method to determine the optimal GNM network. A sensitivity analysis was further conducted to investigate the impacts of the factors on the formation of HSR network. The results showed that GNM could simulate the observed City-HSR network with satisfactory performance, and the city population should be given priority when planning new HSR lines. This study proposed a research framework for exploring the interaction between the city economic network and HSR network and provided data-driven analyses for regional transport policy.

Access to Secondary HSR Stations in the Urban Periphery: A Generalised Cost-Based Assessment

Investments in high-speed rail (HSR) development contribute to reducing regional disparities and improving territorial cohesion. When studying the efficacy of HSR investments, the travel time (and effort) spent on getting to and from the HSR station is crucial. In large urban areas there may be more than one station, and a peripheral station may complement the central stations and become a powerful vector for development. The rationale of this paper revolves around the possibility of applying a methodology based on generalised cost (GC) functions to study the advantages of new HSR-related projects in different locations. With this aim, we evaluate a real example in Seville (Spain) to determine whether the improvement in metropolitan accessibility to HSR services justifies the implementation of a new peripheral station, using a methodology to assess the territorial accessibility based on GC functions and modal travel times obtained with GIS methods, followed by an economic assessment based on a cost-benefit analysis. The paper ends with the main conclusions and a discussion of the methodology applied, the reductions in generalised costs resulting from the new station, the relevance of the case study, the limitations of the approach and further research stemming from this study.

Consumer’s Surplus: An Equity Measure of High Speed Rail Investments

An economic analysis identifies, measures, and compares the costs and benefits of alternative interventions, with the objective of supporting decisions concerning the best use of limited resources. The cost benefit analysis (CBA) has played a significant role within the entire decision-making process, and is the principal assessment methodology. In recent years, equity issues in relation to transportation planning have become a hot topic at an international level. In this paper, the objective was to integrate equity within the evaluation of transport projects, specifically high speed rail projects. Here, consumer surplus is conceived as a monetized measure of both direct and indirect benefits for all zones, and for all socioeconomic categories served and not served by HSR, respectively. The added value of this paper is in rethinking these two shares in the computation of the total net present value as equity measures of the project itself. Specifically, the distribution of the HSR benefits among the different groups or zones in a given study area can be computed, and a comparison of the values for each zone of the study area and for each category makes it possible to assess the effects of equity between zones/categories.

Strategic Planning for High-speed Rail Investments – A Comparative Study of Four Intermediate Stations in Sweden

ABSTRACT This paper departs from research illustrating that the development effects of high-speed rail (HSR) vary between cities being locations for stations and assumes that strategic planning and geographical contexts matter. It gives an overview of general planning through local authorities for a coming HSR and its station locations in four Swedish cities and settlements. The results show that, although Sweden represents a planning system with strong mandates for local authorities, strategic planning takes form through multi-level governance. The paper discusses how this condition the integration of visions for growth and environmental issues for the general planning on the local level.

On the modal shift from motorway to high-speed rail: evidence from Italy

Abstract The development of high-speed rail (HSR) has had a notable impact on modal market shares on the routes on which its services have been implemented. The aim of this study is to analyse whether the HSR expansion in Italy has led to a modal shift from motorway to HSR. We empirically test i) whether HSR openings adjacent to motorway sectors have reduced the total km travelled by light vehicles on these sectors during the period 2001–2017; and ii) whether this reduction has been persistent or even more evident after the opening of on-track competition between two HSR operators. To do so, we carried out a generalized difference-in-differences estimation, using a unique panel dataset that exploits the heterogeneous traffic data within all tolled motorway sectors in a quasi-experimental setting. Our findings reveal that neither HSR openings nor the opening of on-track competition led to a modal shift from motorway to HSR services, as the two transport modes are non-competing. Conversely, HSR expansion had a slightly positive impact on motorway traffic. The extent to which HSR demand could be the result of a modal shift from motorways is a relevant issue in any cost-benefit analysis of HSR investments.

On track towards improved regional development? – Impacts of the Svealand rail line on labour earnings in the Mälaren region

This paper studies the impacts on productivity following an investment in regional high-speed rail in the Mälaren region in Sweden. It uses wage earnings as a measure of productivity and proposes to capture agglomeration effects by measuring changes in effective labour force density induced by the transport improvement across municipalities in the region. This change in effective labour force density is then used as a continuous measure of treatment, in order to estimate the effect of the Svealand line introduction on labour earnings. While the transport improvement had a large impact on the connectivity and commuting patterns in affected municipalities, we find estimates of wage elasticities with respect to agglomeration that are in line with or smaller than average values from previous literature. The productivity effects, estimated over a ten-year time period, are shown to be rather modest and concentrated to the regions whose connectivity to the greater Stockholm area was directly affected. We also find that the main results do not materialize when a much shorter time period is used for analysis, indicating that a rather long adjustment time needs to occur before any effects can be seen.

Role of high-speed rail on social fixed assets investments in China

ABSTRACTRapid development of high-speed rail (HSR) in the past decade has a tremendous boosting effect on China’s economy and society. Under the ‘New normal’, HSR provides an important physical space for the steady expansion of the national economy. This paper uses a panel dataset comprising 285 prefecture-level cities in 2010–2016 to establish an investment measurement model and estimate the impact of HSR on social fixed assets investment. It also uses the difference-in-difference and propensity score matching tests to verify the results. Two important findings arise from the empirical analyses: (1) HSR development significantly stimulates China’s social fixed assets investment, foreign direct investment and real estate investment; and (2) HSR investment does not substitute for investments in other industries, instead, it supplements them. These findings provide strong theoretical and empirical support for China’s long-term HSR development strategy.

High-speed rail and inventory reduction: firm-level evidence from China

ABSTRACTUsing a balanced panel of manufacturing firms from China between 2007 and 2013, we estimate that being connected to a high-speed rail (HSR) system leads to 9.5% reduction in local firms’ input inventory spending. The effect is stronger for downstream industries and private enterprises. A back-of-envelope calculation suggests that each dollar of HSR investment reduces input inventory stock by 12 cents, which is significantly larger than the effects found in previous studies based on highway or road investment. Declines in transportation and communication cost, as well as agglomeration effect, are identified as plausible mechanisms. Our findings reveal a micro channel through which improved transport infrastructure brings about economic gains, and contribute to the cost-benefit assessment of HSR investment.

Economic Impact Analysis on Regional Industries by High-Speed Rail Investments: Application of an Input-Output Model

High-speed rail (HSR) systems have advantages over road and air transport, but they require significant financial investment. The economic viability of HSR systems has been analyzed through various methods. The approaches used cannot consider all intangible variables, or cannot satisfy the needs of all stakeholders. Particularly, in situations when policy makers are considering the construction of a new HSR system to stimulate the regional economy, detailed economic effects need to be measured. Hence, this research focuses on: (a) formulating a methodological framework to utilize an input-output (I-O) model in a given region where the regional I-O table is not provided, and (b) quantifying actual economic effects on regional industries by new HSR investment as a case study. Specifically, a four-step process with an I-O model is proposed, and a three-point effect (output, employment, and income) is assessed in Sejong, Republic of Korea. The effects of building a new HSR station in Sejong might generate over $100 million in output, over $21 million in income, and almost 1,000 jobs. Construction of railroad tracks would have more effects on the regional economy with over $1,671 million output, over $37 million income and over 145,000 jobs. In this study, only publicly available data sources are considered to propose the methodology. This approach, therefore, can be repeated for policy analyses in other locations where the data is limited. Further, regardless of the type of transportation investment, this approach can be used by policy makers seeking secure decisions to quantify economic effects on regional industries.

The effect of infrastructure on worker mobility: evidence from high-speed rail expansion in Germany

We use the expansion of the high-speed rail network in Germany as a natural experiment to examine the causal effect of reductions in commuting time between regions on the commuting decisions of workers and their choices regarding where to live and where to work. We exploit three key features in this setting: i) investment in high-speed rail has, in some cases dramatically, reduced travel times between regions, ii) several small towns were connected to the high-speed rail network only for political reasons, and iii) high-speed trains have left the transportation of goods unaffected. Combining novel information on train schedules and the opening of high-speed rail stations with panel data on all workers in Germany, we show that a reduction in travel time by one percent raises the number of commuters between regions by 0.25 percent. This effect is mainly driven by workers changing jobs to smaller cities while keeping their place of residence in larger ones. Our findings support the notion that benefits from infrastructure investments accrue in particular to peripheral regions, which gain access to a large pool of qualified workers with a preference for urban life. We find that the introduction of high-speed trains led to a modal shift towards rail transportation in particular on medium distances between 150 and 400 kilometers.

High-speed rail transport valuation with stochastic demand and investment cost

ABSTRACTThis paper extends Couto, Gualter, Cláudia Nunes, and Pedro Pimentel [(2015). ‘High-speed Rail Transport Valuation and Conjuncture Shocks.’ European Journal of Finance 21(10–11): 791–805] high-speed rail (HSR) transport valuation framework using real options analysis to embrace the stochastic investment costs. Optimal timing to invest, value of the option to defer, and investment opportunity value are assessed considering uncertainty about HSR demand and investment expenditures, both following a geometric Brownian motion with jumps driven by Poisson processes. The numerical results show consistency with the results presented in Couto, Nunes, and Pimentel (2015).

High-Speed Rail Markets, Infrastructure Investments, and Manufacturing Capabilities

Driven by increasing demand for passenger transportation and congestion in key corridors in the U.S., such as in California, the Northeast, Florida and parts of the Midwest, the U.S. has embarked on various initiatives to examine alternative solutions to this important problem. One of the initiatives relates to the possibility of either introducing or considerably upgrading high-speed rail services. The U.S. currently has little or no comparative advantage due to the lack of this industry in the past. This however does not imply that the U.S. firms cannot develop expertise in specific areas, spur growth, and form profitable alliances and partnerships with the global heavyweights to meet the U.S. investments and service needs. To understand the core issues and potentially provide an answer to the overall high-speed rail investment feasibility question, we need to study the international trainset suppliers, examine the components’ supply-chain, the nature of contracts that have been observed in the recent past, the types of partnerships that have formed, do case studies of the economic and business development that have occurred in other countries, and then make an assessment of potential benefits that may accrue to the U.S. The costs of high-speed rail investments are high and somewhat clearer. But the benefits picture is more uncertain and complex. I primarily focus on making an attempt to clarify some of the complexities that lie at the heart of the potential benefits question. This deeper understanding of the high-speed rail industry may help formulation of appropriate investment policies. In this paper, I focus on this initiative and conduct a detailed study of the high-speed rail industry to provide guidance for policy.

The impact of high-speed rail investment on economic and environmental change in China: A dynamic CGE analysis

This study investigates the impact of high-speed rail investment on the economy and environment in China using a computable general equilibrium (CGE) model. The analysis is implemented in a dynamic recursive framework capturing long-run capital accumulation and labor market equilibrium. A national level impact was simulated through direct impact drivers including land use conversion, output expansion, cost reduction, productivity increase, transport demand substitution and induced demand. The results suggest that rail investment in China over the past decade has been a positive stimulus to the economy, while the effect on CO2 emissions generation has been large. Overall, the economic impacts of rail investment are achieved primarily through induced demand and output expansion, whereas the contribution from a reduction of rail transportation costs and rail productivity increases were modest. In addition, negligible negative impacts were found from land use for rail development and the substitution effect among other modes. Emissions reduction from substitution of rail for other modes was small and offset by output expansion due to lowered rail transport costs and induced demand.