Prof. Dr. Karsten Mau (Maastricht University)
We evaluate how the unfolding of transcontinental railway connections affects China's exports to Europe. Our findings indicate a general increase in exports to the newly connected destinations, which is driven primarily by rail transport. Sea transport benefits meanwhile. We observe an increase in exports without non-local intermediary and a long-term development of local firms' achievement. The firm-level export increases in extensive margin and decreases in intensive margin. Facilitated by the new connection, inland cities and port cities have different performances in their export to other destinations than the newly connected ones. Inland cities have higher export in general but lower in rail export. Export growth concentrates among products with medium value-to-weight ratio and medium time sensitivity. Finally, we document interesting patterns in the regional spillovers. The rail connection benefits the periphery and the effects decrease with distance to the directly connected prefectures.
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