Transportation Development, Regional Concentration and Economic Growth

Chengri Ding

view report (302.34 KB)

“New Geographic Economy” suggests an inverted-U shaped relationship between transport costs and regional economic concentration.  By using data on Chinese prefectures, this paper examines the relationship between transportation development and economic concentration, to investigate the “point effect” and “network effect” of transportation stocks and to gauge their relative magnitudes.  The paper concludes the followings: (1) development of urban roads leads to rising GDP shares in the city proper for both manufacturing and service industries.  Major regional roads have the same effect; (2) “point effect” is found for both urban roads and major regional roads in GDPs; (3) there are spillover effects for both urban roads and major regional roads; and (4) different types of transportation infrastructure have different economic impacts.  The policy implication is that the urban-rural economic growth gap likely continues to increase with urban and regional transportation development during the rapid urbanization concurrently undertaken.