THE OPERATION OF NEW TRANSPORTATION INFRASTRUCTURE AND REGIONAL ECONOMIC EFFICIENCY: A CASE STUDY OF HIGH SPEED RAIL IN WESTERN TAIWAN

This research explores the relationship between the operation of new transportation infrastructure and regional economic efficiency with specific case of Taiwan High Speed Rail (THSR) on regions in western Taiwan by using the annual data from 2004 to 2010 and applying the method of data envelopment analysis (DEA) and Tobit regression model. We discovered that the average EEs for these regions have been deteriorating since the initial operation of THSR in 2007, which indicate that the negative influences are more serious than the positives after THSR’s operation. Besides, we also found that the EEs for these regions has been improved shortly but worsened in a longer term according to the estimated results of Tobit regressions, which implies the construction of transportation infrastructure would not stimulate the regional economic development. We also find that the ratio of employees with college/university education and firm number with R&D activity in a region will stimulate its regional EE significantly.