High-speed railway and city tourism in China: A Quasi-experimental study on HSR operation

Abstract

This paper aims to provide an examination of the general and heterogeneous allowed treatment effects of high-speed rail (HSR) on tourism in cities in China. Based on the implementation of a generalized difference-in-differences (GDID) model and a dose-response (DR) assessment under a quasi-experimental background, this study found significant evidence of a positive average effect of HSR operation on tourism development for both domestic and international tourism. The event study indicates that the counterfactual method implied in this paper is valid, since the parallel trend assumption is confirmed, and the treatment effect of HSR on city tourism has an upwardly increasing trend over time. The heterogeneity test, which separates large cities from medium-sized and small cities, shows that the effect is quite different for the two city types; the effect is not optimistic for large cities, but it is consistently positive for medium-sized and small cities. As an original contribution, this paper conducts a DR study, allowing heterogeneous treatment effects to be captured when cities have different HSR development statuses. This novel method relaxes the strong assumption that there is only one effect level on average for all cities. The results argue that cities with higher HSR development will enjoy more benefits in terms of arrivals and revenues both from home and abroad; however, there are significant differences for the two city groups, as well as for domestic and international tourism. Thus, the findings can offer important information for policy decision making and serve as a valuable reference for research, especially regarding the conclusion drawn from the heterogeneity effect based on city size and HSR development status.