The impact of high-speed rail on the service-sector agglomeration in China

Abstract

High-speed rail (HSR) can potentially influence various economic activities across space. Estimating the impacts of HSR on service-sector agglomeration (SSA) was proven to be difficult but meaningful. In this paper, prefectural-level data from 1998 to 2016 and a panel data program evaluation method are employed to evaluate the effect of the Wuhan-Guangzhou HSR (WGHSR) on the SSA along the route. In this way, we construct hypothetical counterfactuals for SSA index of the WGHSR cities in the absence of the HSR projects using the SSA index in selected non-HSR cities. By comparing the counterfactual index and the actual index, the evaluation of the WGHSR's impact on the SSA along the route can be obtained. The results show that: (a) the WGHSR has increased the SSA by 9.44% on average for cities along the WGHSR, and (b) the impacts of the WGHSR on the SSA are heterogeneous. The WGHSR has brought about both spillover effect and "siphon" effect. In addition, whether the HSR influences and how much it could influence the SSA requires other supplementary conditions to be met. As a national strategy in China, the construction plan of HSR should fully consider its heterogeneity of impact on regional development. Policies should be formulated to drive the HSR's spillover effect to promote regional sustainable development.