Economic Effect of High-Speed Rail: Empirical Analysis of Shinkansen’s Impact on Industrial Location

Abstract

High-speed rail in infrastructure construction has become a priority worldwide, and vast investments have been made; therefore, it has become increasingly necessary to appropriately assess regional economic impact, and more importantly, to deliberate policy to improve regional industrial development. This paper looks at the impacts of Shinkansen lines on industrial locations in Japan. Unlike previous research, this study investigates both socioeconomic factors and physical determinants through an empirical industrial location model and multivariable stepwise regressions. The results indicate that during the period of 1990–2000, the dominant driving force of industrial location has changed from industrial transaction interdependence to population consumption demand. The elasticity of accessibility to the Shinkansen network has also shown an increasing trend from 1990 to 2000. Further expansion of Shinkansen lines would encourage the development of several industries, such as real estate, commerce, and services, and would thus contribute to forming the regional economic structure.