How does China’s HSR development affect urban-rural income inequality? Based on the enterprise productivity perspective

Abstract The rapid development of high-speed rail (HSR) is an important manifestation of transportation modernization in China. This paper investigates the impact of HSR on enterprise productivity and urban-rural income inequality by matching HSR, China’s A-share listed enterprises, and data in Chinese prefecture-level and above cities. In theory, HSR has gathered a large amount of human capital to improve enterprise productivity, continuously promoting labor transfer from rural areas to cities and from inefficient enterprises to high-efficiency enterprises, thereby suppressing urban-rural income inequality. HSR can significantly promote the effect on enterprise productivity and suppress the degree of urban-rural income inequality through enterprise productivity. Further analysis reveals that the impact of HSR on enterprise productivity and urban-rural income inequality is heterogeneous based on different types of enterprises and industries. Specifically, the effect of HSR on suppressing urban-rural income inequality is more significant in non-SOEs and non-technical intensive industries.