Does improved transportation promote innovation? evidence from China’s cities

This paper empirically investigates the effect of improved transportation system on innovation activities in a panel of Chinese cities. We find robust evidence that there is a significant increase in a city's capacity in invention patents due to the opening of the high-speed railway (HSR). Furthermore, increased expenditure in research and development (R&D), expanded business opportunities through trade and foreign direct investment, and intensified import competition are three plausible channels that allow the opening of HSR to spur city innovation.