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Does investment in national highways help or hurt hinterland city growth?

Baum-Snow, Nathaniel, Henderson, J. Vernon, Turner, Matthew A. and Brandt, Loren (2018) Does investment in national highways help or hurt hinterland city growth? Journal of Urban Economics. ISSN 0094-1190

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Identification Number: 10.1016/j.jue.2018.05.001

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.

Item Type: Article
Official URL: https://www.sciencedirect.com/journal/journal-of-u...
Additional Information: © 2018 Elsevier B.V.
Divisions: Geography & Environment
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD100 Land Use
Sets: Departments > Geography and Environment
Date Deposited: 29 May 2018 09:18
Last Modified: 20 Oct 2019 00:15
Funders: International Growth Centre, London School of Economics, Oxford University, Department for International Development
URI: http://eprints.lse.ac.uk/id/eprint/88087

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