Research On The Influence Of High-Speed Railway On China’s Regional Economic Integration

With the normalization of novel coronavirus epidemic,and its heavy blow to the world economy,fierce geopolitical tensions,and the drastic competition game between China and the United States,China faces increasing instability and uncertainty in the international and domestic economic situation.In response to this situation,the Political Bureau of the CPC Central Committee meeting held on July 30,2020,pointed out that we should accelerate the formation of a new development pattern in which domestic economic cycle plays a leading role while international economic cycle remains its extension and supplement.On March 5,2021,the outline of the 14 th Five-Year Plan for National Economic and Social Development of the People’s Republic of China and the Outline of the Vision for 2035(draft)also proposed to accelerate the construction of the dual-circulation development pattern.In 2022,the Central Committee of the Communist Party of China and the State Council jointly issued the Opinions on Accelerating the Construction of a Unified National Market.These policies fully demonstrate that promoting economic integration has become a major national strategy.Promoting economic integration can fully leverage the advantages of the scale of our super market and improve economic efficiency.At this stage,market segmentation exists in different forms in China’s domestic commodity market,capital market and factor market.In this context,exploring how to promote the process of economic integration is undoubtedly of great theoretical significance and practical value for promoting China’s high-quality economic development.Since the sixth-round China’s railway system upgrade in 2007,the development of China’s high-speed rail network has made world-renowned achievements.By the end of2021,China’s high-speed rail mileage reached 41,000 km,covering 94.7% of cities with a population of over 1 million,transporting more than 10 billion passengers,completing a total passenger turnover of more than 3.34 trillion passenger kilometers,and running more than 4,000 trains per day,ranking first in the world in all data indicators.High-speed rail has become a national business card,which was made at a huge cost.According to the data released by the World Bank,it is estimated that China’s high-speed rail infrastructure investment has been over $6 trillion Yuan by 2021.The "14th Five-Year Plan for the Development of Modern Comprehensive Transportation System" predicts that the total investment scale of railway fixed assets during the 14 th Five-year Plan is about 4 trillion yuan,equivalent to that during the 13 th five-year Plan.One of the goals of high-speed rail construction is to strengthen connectivity between major economic zones,promote coordinated and balanced regional development,and support the implementation of major national strategies,the National Development and Reform Commission said in its reply to the Medium-and Long-term Railway Plan(2004,2008 and 2016 versions).Thus,can the construction of high-speed rail support China’s national strategy of building a unified big market? If so,what are the channels behind it.In order to explore the relationship between high-speed railway(HSR)and economic integration,this paper firstly reviews and sorts out relevant literature of HSR economics,economic integration literature and relevant research on the relationship between HSR and economic integration.Understand the progress,shortcomings and important achievements of relevant studies can help us make meaningful contributions.It is found that the number of studies on the impact of high-speed rail on economic integration is still very small.Existing studies have found that high-speed rail has a positive effect on factor flow(labor,capital and information).Due to the difficulties in data acquisition,the progress in empirical research in this area is slow.Scholars have put forward some potential mechanism of the impact of high-speed rail on economic integration,but have not yet came up with a complete theretical framework.In addition,after reviewing the relevant researches on economic integration,we find that the connotation of economic integration is so rich that the measurement of economic integration have became a difficult problem in the empirical research of economic integration.Scholars have to discuss related issues from different dimensions of economic integration,and there are few studies on how to promote economic integration,which leaves room for further studies.Then,this paper discusses three theoretical bases: location theory,new geographic economics(NEG)and transaction cost theory,and analyzes the mechanism of the impact of high-speed rail on economic integration on this basis.Both location theory and new geographic economics show that transportation cost has a decisive influence on the spatial distribution of economic activities,while transaction cost theory points out the "transaction cost" that always exists in economic activities.Based on these basic theories and combined with the characteristics of high-speed railway transportation,this paper proposes that the cross-border flow of elements(capital,information,labor,etc.),goods and services are not simple physical movements but are performed in the form of economic activities.For example,capital flows between regions through commercial activities such as bank lending,venture capital investments,or mergers and acquisitions.Cross-border economic activities have both transport costs and transaction costs.Transportation costs include freight and time costs,while transaction costs include search costs,information costs,supervision costs and so on.High speed rail improves regional accessibility(weighted average travel time)and reduces time costs.High-speed railway increases the flow of passengers between regions,increases the scale and frequency of people’s communication between regions,improves the efficiency,breadth and depth of market information communication between regions,reduces the degree of information asymmetry between regions,and thus reduces transaction costs.High-speed rail promotes regional economic integration by reducing the time cost and transaction cost of crossregional activities.Subsequently,we define the core concepts related to high-speed rail and the concepts related to economic integration.This paper discusses the impact of high-speed railway on economic integration from the perspectives of technology market,capital market and service market based on the characteristics of high-speed railway transportation,research results in related fields and the planning of economic integration in documents of governments at all levels.It should be pointed out that there is no indicators to measure the overall level of economic integration in economic integration literature.Due to the lack of data,this paper cannot measure the overall level of economic integration,so it is difficult to estimate the impact of high-speed rail on the overall level of economic integration.Based on existing studies,this paper observes the impact of high-speed rail on the integration of specific markets from the perspectives of technology market,capital market and service market.In particular,this paper observes the impact of high-speed rail on technology market integration from the perspective of interregional techonology innovation collaboration;To observe the impact of high-speed railway on capital market integration from the perspective of cross-border M&A activities;To observe the impact of high-speed rail on service market integration from the perspective of interregional patent agency services.Finally,based on 2000-2016 prefecture-level cities data,with econometric methods,this study explores the impact of HSR on the integration of markets in three aspects: interregional technological innovation collaboration activities,inter-regional corporate mergers and acquisitions,and inter-regional trade in patent agency services,respectively.The main findings are as follows.First,the study finds that high-speed rail significantly increased inter-regional technological innovation collaboration activities.There was no significant difference in the scale of collaborative technology innovation activities between high-speed rail cities and non-high-speed rail cities in the eight years prior to the opening of high-speed rail,and there was no predetermined trend.Two years after the opening of HSR,the collaborative innovation activities in HSR cities increased significantly,while those in non-HSR cities grew slowly,and the gap between the two groups of cities continued to widen.On average,the number of collaborative patents of a city increased by 26.6% when it launched HSR service.For a pair of cities,the number of collaborative patenting activities between them increased by an average of 12.7% when they launched HSR services.These results are hold after a series of robustness tests,placebo tests,and instrumental variable tests.Second,this paper finds that HSR services promote inter-regional M&A activities.Before the opening of HSR services,there is no significant difference in the scale of crossregion M&A cases between high-speed rail cities and non-high-speed rail cities,nor is there a predetermined trend.Two years after the opening of HSR services,cross-region M&A cases in high-speed rail cities increased significantly,while that in non-high-speed rail cities grew slowly,and the gap between the two groups of cities continued to widen.On average,when a city opened high-speed rail service,its interregional M&A cases increased by 43.7%,and the number of interregional M&A cases with the role as an acquirer increased by 39.1%,while the number of interregional M&A cases with the role as an acquiree increased by 29.6%.For a pair of cities,the number of M&As between them increased by 5.1% when the high-speed rail service was launched between them.These results are hold after a series of robustness tests,placebo tests,and instrumental variable tests.Third,this paper finds that HSR services significantly promote inter-regional patent agency service trade activities.When a city opened high-speed railway service,the number of interregional patent agency service cases increased by 39.1%,the number of interregional invention patent agency service cases increased by 47.1%,the number of interregional utility model patent agency service cases increased by 36.4%,and the number of interregional design patent agency service cases increased by 37.7%.For a pair of cities,the number of patent agency services between them increased by 34.1%when high-speed rail services were opened between them,among which the number of invention patent agency services cases increased by 34.1%,the number of utility model patent agency services cases increased by 28.2%,and the number of design patent agency services cases increased by 28.6%.These results are hold after a series of robustness tests,placebo tests,and instrumental variable tests.Fourth,this paper proposes that high-speed railway services promote inter-regional economic integration through two mechanisms: reducing time costs and reducing transaction costs.Cross-region technological innovation collaborative activities,crossregion mergers and acquisitions,and cross-region patent agency service are essentially interregional economic activities,and the subjects of these activities are very sensitive to time costs.HSR services have significantly compressed the space-time distance between regions and reduced the time cost of inter-regional economic activities.The empirical analysis of this paper finds that the opening of HSR services reduces the average travel time between regions,thus promoting cross-region technological innovation collaborative activities,cross-region mergers and acquisitions,and cross-region patent agency service.The second mechanism by which HSR promotes economic integration is the reduction in the degree of interregional information asymmetry,which arises from the fact that HSR facilitates the movement of passengers between regions.The increased passenger flows,especially business trips,improve the breadth,depth and efficiency of market information dissemination between regions,thus reducing the degree of information asymmetry between regions.The empirical analysis shows that passenger flow increment is one of the intermediate mechanisms for high-speed railway to promote cross-regional collaborative technological innovation activities,cross-regional M&A and cross-regional patent agency service.Fifth,the heterogeneity of the HSR effect.This study finds that the promotion effect of HSR on economic integration is significantly different for HSR cities located in different regions.Eastern cities benefit more from the opening of high-speed rail services than central cities,and western cities benefit the least.In addition,from the perspective of administrative hierarchy,municipalities directly under the central government,provincial capitals and sub-provincial cities benefit the most from the opening of highspeed rail services.In this paper,we find that there is no significant effect of high-speed rail services on cross-regional mergers and acquisitions and patent service trade between secondary cities,and there is a significant positive effect on techonological innovation collaborative activities between secondary cities.However,after the connection of highspeed rail lines between secondary cities and the regional central city,the cross-regional economic activities of secondary cities significantly increase,so the economic linkage with the central city is important in the regional economic development.Finally,this paper also finds that the opening of high-speed railway has a greater promotion effect on technological innovation cooperation and mergers and acquisitions among neighboring cities and cities in the same province than those among non-adjacent cities and cities in different provinces.But at the same time,we also find that high-speed rail network promotes the integration of technology market,capital market and service market of nonadjacent cities and cities in different provinces.