Working Paper: NBER ID: w24596
Authors: Nathaniel Baum-Snow; J. Vernon Henderson; Matthew A. Turner; Qinghua Zhang; Loren Brandt
Abstract: We investigate the effects of the recently constructed Chinese national highway system on local economic outcomes. On average, roads that improve access to local markets have small or negative effects on prefecture economic activity and population. However, these averages mask a distinct pattern of winners and losers. With better regional highways, economic output and population increase in regional primates at the expense of hinterland prefectures. Highways also affect patterns of specialization. With better regional highways, regional primates specialize more in manufacturing and services, while peripheral areas lose manufacturing but gain in agriculture. Better access to international ports promotes greater population, GDP, and private sector wages on average, effects that are probably larger in hinterland than primate prefectures. An important policy implication is that investing in local transport infrastructure to promote growth of hinterland prefectures has the opposite effect, causing them to specialize more in agriculture and lose economic activity.
Keywords: No keywords provided
JEL Codes: R0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Improved access to domestic markets (L10) | Decrease in prefecture population in nonprimate cities (R12) |
| Improved access to domestic markets (L10) | Increase in prefecture population in primate prefectures (R12) |
| Improved access to domestic markets (L10) | Specialization in agriculture in hinterland prefectures (Q12) |
| Improved access to domestic markets (L10) | Decline of manufacturing and services in hinterland prefectures (O14) |
| Access to international ports (L92) | Increase in GDP across all prefectures (O49) |
| Access to international ports (L92) | Increase in population across all prefectures (J11) |
| Access to international ports (L92) | Increase in private sector wages across all prefectures (J39) |
| Highway network (R48) | Reshapes economic activity distribution favoring larger cities (R12) |
| Highway network (R48) | Marginalization of smaller cities (R12) |