Does the preservation policy of historical and cultural heritage promote economic growth? Evidence from China

Abstract

Balancing the preservation of historical and cultural heritage with economic development is a crucial issue in urban sustainability. Although the value of historic and cultural heritage has attracted considerable attention, most previous studies have been based on city case analyses, with few utilizing urban-level data to investigate the causal relationship. Using China’s historical and cultural preservation policy as a quasi-natural experiment, this paper employs the Difference-in-Differences (DID) approach and combines 2000–2019 Chinese county-level data to explore the economic outcome of the Historical and Cultural City (HCC) award. We find that the creation of HCC significantly promotes the economic growth of counties, and this conclusion still holds after parallel trend test and a series of robustness checks. In addition, we check the mechanism from three perspectives: cultural consumption and industry development, employment structure change, and infrastructure, and find that being selected as HCC significantly increases the number of registered enterprises in culture-related services, increases the number of tourists and tourism revenues in the city, facilitates the transfer of employment from the primary to the tertiary industry, and improves the density of the road network. Finally, our heterogeneity analysis indicates that there are geographic and endowment differences in the growth effects of HCC policy, which have a more positive contribution to the economic growth of western regions, provincial border counties, resource-based cities, and poor counties.