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This paper investigates how the extent and configuration of Chinese road and railroad networks has shaped the spatial transformation and degree of compactness of Chinese urban regions in the last 20 years, a period in which center cities were experiencing strong population inflows but relative losses of industry to the urban periphery. We find strong evidence that the presence of radial roads and ring roads outside of the central city reduce central city population density. However radial roads have no effect on the spatial distribution of economic activity (GDP) in urban regions, though ring roads outside of center cities may contribute to industrial decentralization. Rather, in a country where inter-city trade relies heavily on rails, rail networks have significant impacts on the extent to which economic activity decentralizes. Historical transportation infrastructure provides identifying exogenous variation in more recent measures of such infrastructure.
UC Berkeley on May 6-7, 2011 Link to Book