Trains of Thought : High-Speed Rail and Innovation in China

This paper explores the effect of the High-Speed Rail (HSR) network expansion on local innovation in China during the period 2008-2016. Using exogenous variation arising from using courier’s stations during the Ming dynasty as instrument, we find solid evidence that the opening of an HSR station increases cities’ innovation activity. We compute least-cost paths between city-pairs, over time, and report that an increase in a city’s connectivity to other cities specialized in a specific technological field increases the probability for the city to specialize in that same technological field. We interpret it as evidence of knowledge diffusion