Transportation infrastructure and capital mobility: evidence from China’s high-speed railways

Using the data on venture capital investment in China and high-speed railway (HSR) construction as a natural experiment, this study presents empirical evidence about the impact of transportation infrastructure on capital mobility. The study finds that one new HSR train serving a city increases ventu...

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Bibliographic Details
Published in:The Annals of regional science 2021-12, Vol.67 (3), p.617-648
Main Authors: Duan, Liaoliao, Niu, Dongxiao, Sun, Weizeng, Zheng, Siqi
Format: Article
Language:English
Subjects:
Capital investments
Capital movement
Cities
Economics
Economics and Finance
Empirical analysis
Environmental Economics
Geography
High speed rail
Information dissemination
Infrastructure
Investors
Landscape/Regional and Urban Planning
Microeconomics
Mobility
Original Paper
Railway construction
Railways
Regional/Spatial Science
Small cities
Transportation
Venture capital
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Summary:Using the data on venture capital investment in China and high-speed railway (HSR) construction as a natural experiment, this study presents empirical evidence about the impact of transportation infrastructure on capital mobility. The study finds that one new HSR train serving a city increases venture capital inflow to and outflow from that city by 1.0% and 1.6%, respectively. The heterogeneous analyses indicate that small cities, high-tech industries, and younger firms are significantly affected by HSR connections, which show that the accelerated information transmission and investors’ incremental growth expectations may account for the observed effect.
ISSN:0570-1864
1432-0592
DOI:10.1007/s00168-021-01059-w