Evaluation Of The Impact Of China’S High-Speed Rail Opening On Fdi Inflows

With economic development and changes in the international order,China is making massive efforts to integrate into the global value chain.As an important way of development,openness is becoming increasingly important.In recent years,the "Belt and Road",as an important initiative to form a comprehensive opening pattern in China,has promoted China’s economic development and expanded openness to the outside world.In the construction of the "Silk Road Economic Belt",China has paid full attention to the role of infrastructure construction in international trade,and high-quality infrastructure can create a favorable trade and investment environment,thus promoting China’s economic development.In such a context,it is important to study the relationship between high-speed railway development and FDI.This paper investigated the relationship between the opening of high-speed railroads and FDI using sample data of Chinese prefecture-level cities from 2007 to 2018.This paper first compared domestic and international literature of high-speed railways and FDI.The location choice of FDI is mainly influenced by cost,agglomeration effect,policy factors,social environment and market conditions.Existing research on high-speed railroads has focused on its impact on economic development.Excellent infrastructure reduces the risk of investment by multinational companies in the host country,which has an impact on FDI.The empirical analysis of this paper found that the opening of high-speed railways will promote the inflow of FDI,as follows:(1)the opening of high-speed railways in prefecture-level cities can significantly attract the inflow of FDI;(2)the opening of high-speed rail can promote the inflow of FDI,which will improve the quality of economy;(3)the opening of high-speed railways can promote the inflow of FDI,which will optimize the industrial structure.Further,this paper analyzed the heterogeneity in three aspects: East,Central and West regions,marketization index and regional trust environment,in order to examine the differences of the impact of high-speed rail on FDI in different regions.The results show that:(1)the impact of HSR opening on FDI inflow is more significant in the eastern and central regions,while the opening of HSR in the western region does not significantly attract FDI inflow;(2)the promotion effect of HSR opening on FDI is stronger in regions with a high degree of marketization;(3)the promotion effect of HSR opening on FDI is more significant in regions with good trust environment.In the robustness test section,this paper analyzed the empirical results in three aspects,namely,the transformation of FDI proxy variables,considering the impact of the 2008 financial crisis and the instrumental variables approach,and the analysis results still support the research findings of this paper.From the perspective of province,this paper investigated the impact of the opening of high-speed railroads in prefecture-level cities on FDI inflow,which enriches the research on the relationship between high-speed railroads and FDI and provides new ideas to study high-speed railroads and broaden the research horizon.Moreover,this paper extended the relationship between high-speed railway opening and FDI to heterogeneous regions,focusing on the differences in the impact of different regions and providing heterogeneous findings.In addition,this paper emphasized the important role of regional institutional environment and provides suggestions for regional development so that China’s high-speed rail resources can be effectively utilized to attract FDI inflows and promote local economic development and economic structure transformation.