High-Speed Railway and Shrinking Cities: Role of Distance

Abstract

This paper develops a theoretical model grounded in new economic geography to analyze the nexus between high-speed railway (HSR) and the development of shrinking cities. Theoretical research shows that HSR is negatively correlated with the population size of shrinking cities and positively correlated with total factor productivity. To validate the propositions derived from the theoretical model, we conduct empirical tests using panel data of 74 shrinking cities in China from 2007 to 2022. The findings are as follows: 1) HSR significantly reduces the population size of shrinking cities, thereby exacerbating urban shrinkage. Moreover, HSR significantly boosts the total factor productivity of shrinking cities. 2) The effects of HSR on shrinking cities are heterogeneous because of the “distance from the regional central city.” HSR exacerbates the population outflow of shrinking cities located within 220 km of the regional central cities. Conversely, it promotes the population inflow of shrinking cities beyond this distance. An interesting observation is that HSR significantly stimulates the total factor productivity of shrinking cities within 220 km from regional central cities. However, beyond this distance, the total factor productivity of shrinking cities is not significantly boosted by HSR.