The Role of High-Speed Rail in Reshaping Chinese County-Level Economic Structures

TL;DR

This study analyzes how high-speed rail (HSR) expansion in China affects county-level economic development, revealing that HSR benefits vary by region and administrative type, often increasing disparities.

Contribution

It provides micro-level evidence on HSR's heterogeneous impacts across Chinese counties, highlighting the importance of local context in infrastructure-led growth.

Findings

HSR significantly boosts secondary and tertiary sectors in urban districts and eastern counties.

Counties without HSR stations or weaker economies see smaller gains or population outflows.

Heterogeneous impacts challenge the idea that HSR uniformly promotes regional growth.

Abstract

As high-speed rail (HSR) investment accelerates across China, the question of whether such large-scale infrastructure can promote balanced regional development or exacerbate spatial inequality has become central for policymakers and scholars. This study provides systematic micro-level evidence by analyzing a balanced panel of 353 county-level divisions, including urban districts, county-level cities, and counties, along the Shanghai-Kunming and Xuzhou-Lanzhou HSR corridors from 2008 to 2019. Using a multi-period difference-in-differences (DID) approach, supported by event study and propensity score matching, we quantify the heterogeneous impacts of HSR openings across administrative types and regions, with special attention to the presence of direct HSR station access. The results show that HSR expansion significantly increases secondary and tertiary sector output in urban districts (by 2.77 and 8.71 hundred million RMB) and in county-level cities, particularly in the eastern region. In contrast, counties without HSR stations or with weaker economic foundations experience much smaller gains. Some counties also see a notable contraction in the service sector, which is closely linked to substantial population outflows. Robustness checks confirm the causal interpretation. These findings challenge the prevailing view that HSR fosters uniform growth. Instead, the results reveal that infrastructure-led development can intensify spatial and administrative disparities at the county level. The study underscores the need for integrated and locally tailored policy interventions to ensure that HSR investments contribute to inclusive and sustainable regional development.