Does the expansion of a motorway network lead to economic agglomeration? Evidence from China

Abstract

In contrast to most existing studies examining the generative effects of transport infrastructure, this paper addresses the distributive effects of transport infrastructure in China. Using panel data from 274 Chinese municipalities in the 2000-2010 period, our study explores the role of motorway network in the evolution of spatial economic agglomerations. Our results confirm the existence of a distributive effect of road infrastructure in China, and show that an improvement in the motorway network leads to a higher degree of geographic concentration of economic activities. However, in our simulation new motorway construction appears to facilitate spatial dispersal when transport costs fall below a critical level. Moreover, the improved road network has led to a loss of industry in China's lagging areas. Accordingly, current transport investment policy, especially in lagging western areas, has not contributed to spatial equity in China, which contrasts with investment in education, for example.