High-speed rail development and economic performance: A perspective on urban-rural disparities in the treatment and spillover effects

Abstract

With high-speed rail networks being extensively developed worldwide, many studies have investigated their economic impacts regionally. However, little has been known about the urban-rural disparities underlying such effects. This research employs a difference-in-differences approach to analyze treatment effects locally and the spatial spillover effects to neighbors regarding high-speed rail's economic impacts, focusing particularly on variations across urban and non-urban areas. The primary findings reveal that, on average, high-speed rail leads to a increase of 3390 RMB in GDP per capita at the local level. However, the spillover effects on neighboring areas are not statistically significant. This study also highlights the existence of urban-rural disparities in both the treatment and spillover effects. Specifically, establishing high-speed rail stations is positively linked to local economic development in both urban and non-urban areas, with the former experiencing a more significant impact (5950 RMB) than the latter (2190 RMB). In addition, stations in urban areas contribute to economic growth in nearby non-urban areas but have an adverse effect on neighboring urban areas. This finding underscores the urban-rural interdependence and the competition for resources among urban areas. This study holds significant policy implications for high-speed rail investments, eliminating urban-rural inequality, industrial structure adjustments, and resource reallocation.