The Impact of High-speed Rail on FDI Attraction in Chinese Cities

This research aims to investigate how China's high-speed rail system affects Chinese cities' appeal to foreign direct investment. This study uses the multi-time point difference to difference model to investigate the consequences in relation to foreign direct investment in high-speed rail in Chinese cities using panel data from 300 prefecture-level cities in China between 2008 and 2021.The findings indicate that the appeal of foreign direct investment is significantly impacted by the introduction of China's high-speed rail. Placebo test and delayed single-stage regression are also used in this paper, which proved that result is robust. In a further heterogeneity test, Chinese cities are classified according to center-periphery, high-speed railroads and city type. The findings indicate that the FDI influx into nearby cities, non-main line cities, and agricultural cities is significantly impacted by high-speed rails opening. There is no significant effect on FDI inflow in central cities and Cities with high-speed rail main lines The influence of FDI inflow on the service cities is negative. Construction of high-speed rail should be prioritized by the government in the nation's agricultural and comparatively underdeveloped cities, and encourage the building of high-speed rail that is not main line.