Research on the Impact of High-Speed Rail Opening on Financial Resource Allocation in the Context of Urban-Rural Integration: An Estimation Based on the PSM-DID Model

Abstract

Over the past few years, due to the expansion of the high-speed rail network in China and the ongoing development of rural revitalization and urban-rural integration, the flow of people, money, and other factors has been increased by reducing the distances over space and time between cities, which deeply changes the structure of regional financial resource allocation. This paper uses the PSM-DID model to empirically examine the effect of high-speed rail opening on financial resource allocation in prefecture-level cities and its transmission mechanism using panel data of 300 prefecture-level cities across the country in 2007-2022. The baseline regression results show that high-speed rail opening has a strong and positive promoting role on regional financial development, and this finding holds true even after conducting a number of robustness analyses, including placebo tests. Heterogeneity analysis shows that the promoting effect of high-speed rail on financial resource allocation is stronger in the east region, large and medium-sized cities, and ordinary prefecture-level cities. In terms of the optimal configuration of the high-speed railway network, enhancing the absorption capacity of underdeveloped areas, adopting differentiated policies, balancing regional finance resource allocation, and developing supporting guarantee systems, this paper offers recommendations to solve the financial siphon effect brought about by the high-speed railway and aims to offer references regarding how to promote the balance of urban and rural financial development and facilitate the construction of high-speed railways to support rural revitalization and urban-rural integration.