The Impact Of The Opening Of High-speed Rail On FDI Attraction In Middle And West Regions

Over the past couple of years,we have paid a lot of capital in the construction of infrastructure,among which the construction of high-speed railway in China are of considerable importance and get great success.Last year,the 13th Five-Year Plan was concluded,main framework of high-speed railway named "four vertical and four horizontal" has already finished,the main channel of high-speed railway and general speed trunk railway noted as "eight vertical and eight horizontal" are also building up the speed of construction.The construction of high-speed railways has spread to all parts of the country,including cities in the middle and western areas of China.High-speed railway network that covers the middle and western areas of China do have great implications for quality improvement of service,reinforcing the role that acts as a pivot for the city with high-speed railway station and the related supporting infrastructure are also being constantly built and improved.FDI can bring advanced knowledge,technology and scientific operation mode to the destination,provide employment notch for the country,and improve the innovation and competition consciousness of local enterprises.What affects the inflow and spatial distribution of foreign capital are not only the level and effects of economic and stock of resources of the host country,but also the investment cost and regional infrastructure construction.This article attempts to explore whether the opening of high-speed railway will attract foreign investment in middle and western areas of China or not from the angle of view of transportation infrastructure.The structure of this paper is divided into the following parts:Chapter 1 and Chapter 2 describes introduction of the article and the research literature.Among the third chapter,the development process of high-speed railway and FDI was summed up.In the fourth chapter,theoretical mechanism analysis was made about how does the high-speed railway construction affect FDI flow into the midwest of China.The fifth chapter,which takes up great importance of this article,uses the data of 183 cities in midwest areas of China from 2002 to 2017 to conduct empirical analysis and mechanism test,and further conducts heterogeneity analysis according to city location and city size,and confirms that the impact is not accidental through two robustness tests and parallel trend tests.The sixth chapter,shows up the conclusions through this paper and proposes some policy recommendations.There are four major findings:Above all,the opening of high-speed railway has enhanced the attractiveness of FDI to high-speed railway cities along the middle and west areas of China,and the mean net benefit is about 1.516 billion yuan,which is remarkable at the significance level of one percent.Secondly,Sub-group analysis are used to assess sub-group effects,high-speed railway covers the western areas of China exhibit significant facilitation to FDI.In the cities belong to western China,with mean net benefits about 2.5 billion yuan and remarkable at the significance level of ten percent.For the cities belong to western areas,the accessibility of high-speed railway has expanded the traffic environment in the western areas,with good marginal effect and promoted mobile elements and smoothed combine Further,the western regions are in resource-abundant and energy-rich which can be better dug out and well-exploited.However,there is no difference for cities belong to central areas of China whether they have high-speed rail station or not,what causes this result is that former infrastructure construction has already crowded out the effect that the high-speed rail brought.In earlier stage of erecting of traffic facilities of which are relatively developed and keep relatively fast growth.,so the effect is almost insignificant.Different cities are of different effects when they are in different economic level.Thirdly,as for cities with different total population size of urban scale,the effect is larger for the bigger population size than the smaller one.The mean net impact of high-speed railway on the larger scale of a city reached 1.154 billion yuan,while 705.4 million yuan in average net impact on second-tier city,and the two coefficients are significant at the significance level of five percent.First-tier cities owns more resident population,and their high-quality workforce are far beyond second-tier cities,which can also gather more fixed asset investment worthy,bring more and more development opportunities.Fourth,the benefits that high-speed railway brings will increase over time.The improvement of accessibility between regions brings good signals for industry accumulation and positive signs to market,and because investment are of path dependence and aggregation.Accompanying the strengthening concentration,industrial structure of middle and western of China are becoming more and more improved and upgraded,FDI will tend to choose cheaper cities to invest belong to middle and western areas of China.In the fledgeless stage of development,the preferential policies of the state were partial to the eastern cities,resulting in big disparity in development level and supporting facilities among three parts of mainland.To a certain extent that high-speed railway has given aid to the unenlightened middle and western areas of China,brought about blossom opportunities,and brought a steady stream of development power to the unenlightened regions.Based on the conclusions,we give the policy recommendations of three aspects:on the one hand,we proved that high-speed railway do have significant effect on middle and western cities of China attracting FDI to their native place through empirical research,so we should accelerate the construction of high-speed rail that is famous as "eight vertical and eight horizontal" process,play its positive network externalities.By connecting the function of high-speed railway has formed the "eastern take arms of middle,middle take arms of west" advance side by side.Second,our state government should put the emphasis on the construction of supporting infrastructure and environmental improvement in the cities belong to middle and western areas to offer lasting power or impetus for the transfer of foreign investment centers.Thirdly,we should strengthen the ability of cities belong to the unenlightened middle and western areas of China to support diversity industries of our countries,accelerate industrial transformation and upgrading,provide a steady stream of power for undertaking industrial transfer from the eastern coastal areas,and adapt to the development pattern that the focus of trade and investment is gradually shifting to the middle and western areas of China.