Catalyzing entrepreneurship in county regions: Assessing the impact of high-speed rail connectivity

Abstract

Entrepreneurial activities play a pivotal role in national economic development. Utilizing panel data from Chinese counties, this article examines the impact and underlying mechanism of high-speed rail (HSR) connectivity on county-level entrepreneurship, employing a multi-period difference-in-differences model. The findings indicate that HSR connectivity significantly enhances county entrepreneurship, a result that remains robust after rigorous testing methods such as Bacon decomposition, instrumental variable analysis, and two-stage DID estimation. Mechanism tests reveal that HSR connectivity promotes entrepreneurship by promoting technological spillover, accelerating economic agglomeration and boosting technological spillovers in counties. Heterogeneity analysis shows that the promotional effect of HSR connectivity on entrepreneurship is primarily observed in small-scale enterprises, as well as in labor-intensive and capital-intensive industries. Additionally, there is distinct core-periphery heterogeneity, with HSR connectivity mainly strengthening entrepreneurial vitality in core counties and non-interprovincial border counties, while having a limited impact on periphery and interprovincial border counties. Further analysis reveals that the positive impact of HSR connectivity on county-level entrepreneurship is highly localized, exhibiting a distinct “pass-through effect”. Specifically, the entrepreneurial benefits of HSR connectivity are predominantly concentrated in directly connected counties, while adjacent and along-the-line counties experience negligible spillover effects.