Research on the Impact of Expressway on the County Economy Based on a Spatial DID Model: The Case of Three Provinces of China

Abstract

Infrastructure construction results in transportation cost and regional economy changes. Based on the exogenous infrastructure change of a county highway opening as a natural experiment, this paper uses the spatial difference-in-differences (DID) model to analyze the impact of highway construction in three different provinces of China from 2004 to 2017. It was proved that highway connectivity had no significant or negative impact on the economy of the counties in three provinces that the highway passes through. In addition, highway connectivity was claimed to have obvious spatial spillover effects, which could promote the economic development of the whole region. For counties belonging to provinces in different regions and stages of economic development, we establish a spatial DID model that integrates time and space dimensions to study the impact of expressways on county economic development, to make up for the traditional DID model’s dependence on SUTVA assumptions, and to obtain spatial spillover effects.

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