Measuring the impacts of subway openings on location choice: Systematic evidence from service enterprises, Beijing

Abstract

Studies concerning the location choices of enterprises are predominantly focus on manufacturing enterprises, with limited attention given to service enterprises. This paper examines Beijing, whose services account for more than 80 % of GDP, to ascertain whether enhanced accessibility through the expansion of subway network facilitates new service enterprises to capitalize on agglomeration economies, ultimately contributing to the transformation of the urban landscape. Using a matched dataset comprising 16,571 gird cells, each measuring 1 × 1 km in size, and information on newly registered service enterprises in Beijing from 2007 to 2018, we employ a mult-period difference-in-difference (DID) estimation methodology, leveraging exogenous shocks from the opening of new subway lines, to examine the causal relationship between subway openings and the location decision of service enterprises. Our findings indicate that the subway network positively influences the establishment of service enterprises, with a 53.8 % increase in newly registered service enterprises following the opening of a new subway line. Furthermore, the agglomeration effects of subway network are more salient for newly registered producer service enterprises, which tend to cluster in central areas, whereas consumer service enterprises demonstrate a preference for agglomeration in the city's periphery, thereby contributing to the reconfiguration of the city's urban structure.