Are Expensive Expressways in China Attractive to Businesses? Evidence From the Location Selections of Manufacturing Enterprises

Abstract

Most expressways in China are tolled, making expressway transportation expensive for enterprises. Traditional location theory focuses only on transportation distances and transit costs, making it difficult to explain how expressways influence location decisions of enterprises. This research starts from the perspective of expressway travel times to explain how tolled expressways affect the location choices of new manufacturing enterprises. A geographic information system digital map of expressways for the years 2000–2013 was developed. The origin–destination matrix module was used to calculate the expressway travel times of 293 cities. Count data regression models, including probit, Poisson, zero-inflated Poisson, and negative binomial regression, were applied to empirically study the influence of expressway construction on the location selections of new manufacturing enterprises. The results show that reduced expressway travel time significantly attracts new enterprises and positively affects the location selections of manufacturing enterprises in China. Further, this finding reveals significant heterogeneity across different manufacturing industries.