University essay from Lunds universitet/Nationalekonomiska institutionen

Abstract: The regional disparities in China are increasing, at the same time as the growth moderates. In order to keep successful development in the future, China is rapidly developing the rail infrastructure, as one of the main channels to obtain a balanced regional development. The argument is that regional inequalities will decrease through increased economic interconnection and mobility provided by the rail system. This study aims to investigate how regional development, measured by levels of education, healthcare, employment and environmental pollutants, is affected by the level of rail infrastructure, measured by train travel intensity. A panel dataset of 31 provinces in China during the years 2008-2017 is empirically tested using fixed-effects method and a multivariate approach. The test results indicate that a higher level of rail infrastructure is positively correlated with employment rates, but negatively correlated with population share in higher education. No statistically significant effect was found on level of healthcare or environment. The overall results indicate that the relationship between rail infrastructure and regional development is contradictory. The study concludes that the selection of measurements representing regional development determines the observed correlation with rail infrastructure.

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