A synthetic difference-in-differences model for the influence of CR Express on Chongqing’s economy

Abstract

Purpose – The China–Europe Railway Express (CR Express) in Chongqing has operated regularly and undergone large-scale development. Its impact on Chongqing’s economic growth has become increasingly evident, necessitating further research in this field. Design/methodology/approach – This study employs the opening of CR Express as a quasi-natural experiment, designating Chongqing, which inaugurated the CR Express in 2011, as the treatment group. 13 provinces and cities that had not yet opened the CR Express until 2017 were selected as the control group. Utilizing panel data from 14 provinces across China spanning from 2006 to 2017, the synthetic control method (SCM) is employed to synthetically construct Chongqing. To quantify the difference in economic development levels between Chongqing with the operation of the CR express and Chongqing without its operation. Key metrics such as gross domestic product (GDP), per capita GDP, total retail sales of consumer goods, import and export value and the proportions of the secondary and tertiary industries are employed to measure urban economic development capabilities. Chongqing is designated as the experimental group, and a double-difference model is constructed to regress the operation of the CR Express against economic development capabilities. Robustness tests are conducted to validate the analytical results. Findings – The results indicate that, compared to provinces without the operation of the CR Express, the initiation of the CR Express in Chongqing significantly enhances the economic development level of the city. The opening of the CR Express exhibits a pronounced positive impact on Chongqing’s economic development, and these findings remain robust and effective even after parallel trend tests and placebo tests. Originality/value – The study represents an expansion of the theoretical framework. In contrast to previous studies that relied on a single indicator such as GDP, this study selects six indicators from the dimensions of economy, trade and industry to measure regional economic development capabilities. Furthermore, employing the grey relational analysis method, the study screens these indicators, thereby providing a theoretical basis for the selection of indicators for measuring regional economic development capabilities.

Keywords

• CR Express
• Regional economic development
• Synthetic model
• Difference-indifferences method