Roads, Railways and Decentralization of Chinese Cities

May 2 2016

This paper investigates how the extent and configuration of Chinese road and railroad networks has shaped the spatial transformation and degree of compactness of Chinese urban regions in the last 20 years, a period in which center cities were experiencing strong population inflows but relative losses of industry to the urban periphery. We find strong evidence that the presence of radial roads and ring roads outside of the central city reduce central city population density. However radial roads have no effect on the spatial distribution of economic activity (GDP) in urban regions, though ring roads outside of center cities may contribute to industrial decentralization. Rather, in a country where inter-city trade relies heavily on rails, rail networks have significant impacts on the extent to which economic activity decentralizes. Historical transportation infrastructure provides identifying exogenous variation in more recent measures of such infrastructure.

The Review of Economics and Statistics 2017, 99, 3,  435–4483

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Authors

Vernon Henderson joined the LSE in September 2013 as School Professor of Economic Geography, having previously been Eastman Professor of Political Economy at Brown University, USA.

Matthew A. Turner

Professor Turner holds a bachelor's degree from the University of California and a Ph.D. in economics from Brown University. His research focuses on the economics of land use and transportation.

Qinghua Zhang is an Associate Professor, Department of Applied Economics in Peking University. Her main research interests include urban and regional economics, public finance, and applied theory.