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Zou, Wei; Chen, Liangheng; Xiong, Junke
International review of economics & finance, 11/2021, Letnik: 76Journal Article
This paper establishes a general equilibrium trade model, adopts the “market access” approach to measure the impact of the high-speed railway (HSR) network on the economic growth of 110 main Chinese prefecture-level cities, of which we manually collected the pairwise travel distances and railway speeds to calculate MA (Market Access). The empirical results show that the launch of HSR exhibits significant positive effects on growth, specifically, 1 percentage increase in MA leads to an increase of real income by 0.123 (controlling region fixed effect) or 0.121 (controlling province fixed effect) percentage. Counterfactual econometrics analysis shows that if all HSR were removed in 2015, the market access would fall by an average of 76.2%, and aggregate real income would decline by up to 9.4%. The growth effect of HSR varies across cities, and HSR has a more prominent impact on services than on manufactures. The conclusion stands valid after a series of robustness tests.
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