Upgrade of Transportation Infrastructure and Siting of Polluting Enterprises: The Case of High-Speed Railway Launch in China

Cai Hongbo (蔡宏波)1, Zhong Chao (钟 超)1,2* and Han Jinrong (韩金镕)1

1 Business School, Beijing Normal University, Beijing, China

2 Institute of European Studies, Chinese Academy of Social Sciences, Beijing, China

Abstract: With the quasi-natural experiment of the launching of high-speed railways in Chinese cities, this paper empirically investigated the effects of the upgrade of the transportation infrastructure on the site selection of polluting enterprises. We found that although the launching of a high-speed railway generally has a negative impact on the siting of polluting enterprises: (i) While there was a significant decrease in polluting enterprises of a private and other nature, the reduction in overseas-funded and state-owned enterprises was insignificant; (ii) while the launching of a high-speed railway greatly restrained the entry of polluting enterprises in the eastern region, large cities and more developed cities, this was followed by the movement of more polluting enterprises to the central and western regions, small and medium-sized cities and less developed cities; (iii) there was a significant decrease in polluting enterprises in environmentally conscious cities after the launching of a high-speed railway. This paper also found that infrastructure upgrade may influence the siting of polluting enterprises through the following: Environmental cleanness, factor concentration and spatial integration. Government authorities and market entities should be fully aware of and attach great importance to how the transportation infrastructure influences the site selection of businesses, as this is of great significance for China’s regional development planning, local business climate and investment planning, environmental protection, and other related policymaking initiatives.

Keywords: Transportation infrastructure, high-speed railway, polluting enterprises, site selection

JEL Classification Code: H54, Q56, R42P30

DOI: 10.19602/j.chinaeconomist.2022.05.05