Does transportation infrastructure development affect enterprise R&D investment? The case of city subway operation in China

While transportation infrastructure can accelerate innovation, no research has yet explored the link between intra-city subway operation and innovation. This study responds to this gap in the literature. The rapid, large-scale development of China's subway system can serve as a 'quasi-natural experiment'. Based on panel data on listed manufacturing companies from 2008 to 2020, this study employs the time-varying difference-in-differences method to explore the impact of subway operation on enterprise R&D investment and the impact's heterogeneity under different enterprise characteristics. The results show that new subways have increased enterprise R&D investment and that the subway's positive impact on R&D investment is more significant in enterprises with high employee compensation, non-state-owned enterprises, and large enterprises. Moreover, subway operation promotes enterprise R&D investment by attracting tech talent and promoting infrastructure convenience.