The impact of transport infrastructure on urban economic activity along the Belt and Road: Evidence from NPP-VIIRS-like nighttime lights

Transport infrastructure can reshape market access and thereby influence local economic activity, yet city-level evidence on the economic effects of large cross-border transport networks remains limited. Using panel data for 734 cities across Asia, Europe, and Africa from 2010 to 2021, this study examines how changes in market access associated with transport infrastructure development under the Belt and Road Initiative (BRI) are related to urban economic activity. Rather than measuring transport conditions solely by the infrastructure scale, we construct a city-level market access index based on intercity trade costs to capture the economic linkages generated by transport networks and combine it with VIIRS-like nighttime lights data. We estimate this relationship using city and year fixed effects, supplemented by alternative specifications and instrumental-variable analyses. The baseline estimates show that improvements in market access associated with transport infrastructure development are positively and significantly related to urban economic activity. This relationship remains robust across alternative model specifications and endogeneity checks. The channel analysis further provides evidence consistent with three potential channels: industrial upgrading, livelihood improvement, and innovation investment. The positive relationship between market access and urban economic activity is stronger after countries formally enter BRI cooperation, in relatively higher-income economies, and in cities located in countries that share a land border with China. These findings highlight market access as an important dimension for evaluating the local economic implications of cross-border transport infrastructure, suggesting that the economic effects of such infrastructure depend critically on the extent to which transport-network improvements translate into gains in market access. The analysis nevertheless remains subject to measurement limitations associated with nighttime-light-based economic activity and trade-cost-based market access.