Does Investment in National Highways Help or Hurt Hinterland City Growth?

47 Pages Posted: 14 May 2018

See all articles by Nathaniel Baum-Snow

Nathaniel Baum-Snow

University of Toronto - Rotman School of Management

J. Vernon Henderson

London School of Economics & Political Science (LSE); National Bureau of Economic Research (NBER)

Matthew Turner

Brown University - Department of Economics

Qinghua Zhang

Peking University - Guanghua School of Management

Loren Brandt

University of Toronto - Department of Economics; IZA Institute of Labor Economics

Date Written: May 2018

Abstract

We investigate the effects of the recently constructed Chinese national highway system on local economic outcomes. On average, roads that improve access to local markets have small or negative effects on prefecture economic activity and population. However, these averages mask a distinct pattern of winners and losers. With better regional highways, economic output and population increase in regional primates at the expense of hinterland prefectures. Highways also affect patterns of specialization. With better regional highways, regional primates specialize more in manufacturing and services, while peripheral areas lose manufacturing but gain in agriculture. Better access to international ports promotes greater population, GDP, and private sector wages on average, effects that are probably larger in hinterland than primate prefectures. An important policy implication is that investing in local transport infrastructure to promote growth of hinterland prefectures has the opposite effect, causing them to specialize more in agriculture and lose economic activity.

Suggested Citation

Baum-Snow, Nathaniel and Henderson, J. Vernon and Turner, Matthew and Zhang, Qinghua and Brandt, Loren, Does Investment in National Highways Help or Hurt Hinterland City Growth? (May 2018). NBER Working Paper No. w24596, Available at SSRN: https://ssrn.com/abstract=3177955

Nathaniel Baum-Snow (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

J. Vernon Henderson

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Matthew Turner

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

Qinghua Zhang

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

Loren Brandt

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S 3G7
Canada
416-978-4442 (Phone)
416-978-6713 (Fax)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
13
Abstract Views
287
PlumX Metrics