China Railway High-Speed: The Impact of Transportation Infrastructure on Corporate Innovation

Posted: 18 Apr 2018

See all articles by Hou Qingsong

Hou Qingsong

Huazhong University of Science and Technology (Formerly Tongi Medical University)

Qiliang Liu

Wuhan University - School of Economics and Management

Zhifeng Yang

Stony Brook University

Liandong Zhang

Singapore Management University - School of Accountancy

Date Written: April 1, 2018

Abstract

This study examines the impact of transportation infrastructure on corporate innovation. This topic is important because transportation infrastructure represents one of the major types of government spending and innovation is crucial for economic growth at both firm- and national levels. To shed light on this important topic, we exploit the introduction of high-speed rail services (HSR) in China from 2007 to 2013 as exogenous shocks that improved the transportation infrastructure of smaller cities with unplanned access to HSR. Using a difference-in-differences approach, we show that, relative to control firms without access to HSR, treated firms located in cities with unplanned access to HSR exhibit increased level of innovation output as captured by increased number of patents applied and granted. We identify two possible channels through which transportation infrastructure enhances innovation: increased technical knowledge spillover and improved attractiveness to talents.

Keywords: transportation infrastructure, innovation, high-speed rail, knowledge spillover

JEL Classification: H5, O3, R4

Suggested Citation

Qingsong, Hou and Liu, Qiliang and Yang, Zhifeng and Zhang, Liandong, China Railway High-Speed: The Impact of Transportation Infrastructure on Corporate Innovation (April 1, 2018). Available at SSRN: https://ssrn.com/abstract=3153965

Hou Qingsong (Contact Author)

Huazhong University of Science and Technology (Formerly Tongi Medical University) ( email )

1037 Luoyu Rd
Wuhan, Hubei 430074
China

Qiliang Liu

Wuhan University - School of Economics and Management ( email )

Wu Han, Hu-Bai 430072
China

Zhifeng Yang

Stony Brook University ( email )

Health Science Center
Level 3, Room 043
Stony Brook, NY 11794-8322
United States

Liandong Zhang

Singapore Management University - School of Accountancy ( email )

60 Stamford Road
Singapore 178900
Singapore

HOME PAGE: http://accountancy.smu.edu.sg/faculty/profile/150531/Liandong-ZHANG

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