Transportation infrastructure and entrepreneurship: Evidence from high-speed railway in China

By Liya Ma, D. Niu, Weizeng Sun. 2021

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Abstract Using high-speed railway (HSR) construction in China as a quasi-experiment, this paper contributes to the understanding of how transportation infrastructure affects entrepreneurship. On the basis of a difference-in-difference approach, we find that access to an HSR connection leads to an increase in entrepreneurship by approximately 3.5 percentage points (35% of the mean). Mechanism exploration suggests that market potential is the main channel that HSR encourages entrepreneurial activities, which is realized by accelerated information sharing and face-to-face interactions. And the effect is bigger for high-educated families, wealthy families and in large cities.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/09d52344fc0b84beced737df5b6c2ca6455c826b