Railways and the Local Economy: Evidence from Qingzang Railway

49 Pages Posted: 6 May 2013 Last revised: 2 Oct 2013

See all articles by Yang Wang

Yang Wang

Binzhen Wu

Tsinghua University - School of Economics & Management

Date Written: September 5, 2012

Abstract

This paper empirically examines the causal effect of railway infrastructure on local economic development using the construction of Qingzang railway as a natural experiment. We apply the difference-in-difference method and find that the Qingzang railway significantly stimulated the economy of the counties along its path (railway counties). The local GDP per capita increased by about 33% after the railway had begun to operate. The effect manifested primarily through the positive railway effect on manufacturing industry. In addition, the effect did not vary significantly with the initial economic status of the railway counties. The GDP per capita of the off-railway counties that are adjacent to the railway counties was not significantly affected.

Keywords: Transportation Investment, Railway Infrastructure, Economic Development, Qingzang Railway, China

JEL Classification: R11, H54, O22

Suggested Citation

Wang, Yang and Wu, Binzhen, Railways and the Local Economy: Evidence from Qingzang Railway (September 5, 2012). Available at SSRN: https://ssrn.com/abstract=2261016 or http://dx.doi.org/10.2139/ssrn.2261016

Binzhen Wu (Contact Author)

Tsinghua University - School of Economics & Management ( email )

School of Economics and Management
Tsinghua University
Beijing, Beijing 100084
China

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