Trains of thought: High-Speed Rail and innovation in China

Abstract

This paper explores the effect of the High-Speed Rail (HSR) network expansion on local technological change of Chinese cities, during the period 2008-2016. Using exogenous variation arising from the courier’s stations during the Ming dynasty as instrument, we first find evidence that the opening of a HSR station increases cities’ innovation activity. The paper also looks at the effect of the HSR on the technological trajectories of cities. Computing least-cost paths between city-pairs, we obtain that the probability of a city to branch into a new technological field is related to the current portfolio of the cities to which it connects to through the HSR network, even after accounting for the local stock of capabilities.