Highways and Market Integration in the Yangtze River Economic Belt: Dynamics and Regional Heterogeneity

This study explores the dynamic and regional effects of highway development on market integration within China’s Yangtze River Economic Belt (YREB), a region of strategic economic importance. Spanning 11 provinces and contributing nearly half of China’s GDP, the YREB faces challenges of uneven development and market segmentation. Highways, as crucial transportation infrastructure, are posited to enhance market integration by reducing costs, improving connectivity, and fostering trade and labor mobility. Utilizing econometric modeling and spatial analysis, the study examines both the nonlinear and heterogeneous impacts of highways on regional integration. Results reveal that highway development significantly promotes market integration, particularly in the short term. However, its marginal effects diminish over time as networks approach saturation. Moreover, highways disproportionately benefit economically advanced and less geographically rugged regions, exacerbating core-periphery disparities. The study identifies critical factors influencing these outcomes, including economic development levels, geographic conditions, and infrastructure saturation. The findings underscore the dual role of highways in fostering connectivity and reinforcing regional inequalities. Policy recommendations emphasize targeted infrastructure investments in underdeveloped areas, integration of highway projects with broader economic policies, and phased infrastructure development strategies to optimize returns and address regional disparities. This research advances understanding of the economic effects of transportation infrastructure, providing theoretical and practical insights for fostering equitable growth and market integration in regional economies.