The Economic Diffusion Radius of High-Speed Railway Stations

Abstract

We explore the economic diffusion radius of high-speed railway (HSR) stations. Using spatial differences-in-differences (DID) method, we find that the openings of HSR stations can promote enterprises’ performance within 20 kilometers. We also observe a heterogeneity of the effect in different administrative divisions, with a positive impact on surrounding firms in the same city as the nearest station (the "Diffusion Effect"), and a negative impact on enterprises in neighboring city (the "Backwash Effect"). Our paper helps policy makers better utilize the infrastructure of HSR. Furthermore, our spatial spatial DID method offers a new perspective to address endogeneity in HSR studies.

Keywords: High-speed railway, Economic diffusion radius, Backwash Effect, Spatial DID