Good intentions gone awry: Rail lines and inner‐city development

Abstract This study explored the impact of transportation systems in urban areas on economic activity. We examined the effect of traditional Chinese railway construction fencing on urban spatial development using nighttime luminance and railway data from prefecture‐level cities. The study found that the fencing effect exacerbated uneven development on either side of the railway, especially in economically underdeveloped areas. These results were supported by different measures of development and a placebo test. The fencing effect was also found to affect the location of newly registered firms and the total factor productivity of industrial firms, leading to unbalanced growth on either side of the railway.