How high-speed rail changes the spatial distribution of economic activity: Evidence from Japan’s Shinkansen

Kazunobu Hayakawa, Hans Koster, Takatoshi Tabuchi and Jacques-François Thisse in this voxeu research:

The economic and social consequences of investments in transport infrastructure generate heated academic and policy debates because they typically involve costly investments that are supposed to yield high payoffs. Particularly telling examples of large transport infrastructure investments are investments in high-speed rail.

This column shows that the Shinkansen has had a substantial effect on Japan’s spatial distribution of employment. The relative position of municipalities within the network and their underlying location fundamentals are essential in understanding why the effects of an extensive infrastructure are positive or negative at the local level.