Quantifying the Economic Impact of High-Speed Rail on Less Economically Developed Areas

Little is known about how high-speed rail (HSR) affects less economically developed regions. Our study focuses on the effects of the Lanzhou-Xinjiang (Lanxin) HSR line, located in the less developed Western region of China. We estimate difference-in-differences models to evaluate the causal relationship between economic outcomes and the HSR line, and we test the robustness of our results using the Synthetic Control Method. Panel data spanning the announcement, construction, and operational phases of the HSR line are used to study its heterogeneous impacts over time. Our analysis reveals no substantial influence of the Lanxin HSR on the GDP per capita of all cities with HSR stations during the announcement, construction, or operation phases. However, the economic impacts of the Lanxin HSR on cities with varying socioeconomic development levels are not uniform. Larger provincial capital cities experience no increase in GDP per capita. Conversely, non-capital cities, typically characterized as medium and small-sized municipalities, witness a 6.8 percent surge in GDP per capita during the construction period.