High-speed railways and collaborative innovation

This paper investigates the impact of infrastructure on innovation collaboration between enterprises in different locations using the introduction of high-speed railways in China. Applying an instrumental variable approach to control for the endogeneity of high-speed railways, and using a large enterprise census that includes both manufacturing and service sectors in China, we find that high-speed railways can improve innovation collaboration substantially at the city level. More importantly, we match city pairs based on high-speed railway routes and calculate the amount of time saved by a high-speed railway for each city pair. The empirical results suggest that the innovation collaboration also increases significantly at the city-pair level. Innovation quality, measured by patent citations between cities, also increases. Further evidence on spatial heterogeneity, industry heterogeneity and ownership heterogeneity suggests that the impact of high-speed railways is more significant for collaboration in less developed regions, in the service sector and in domestic enterprises.