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This paper empirically investigates the effect of improved transportation system on innovation activities in a panel of Chinese cities. We find robust evidence that there is a significant increase in a city’s capacity in invention patents due to the opening of the high-speed railway (HSR). Furthermore, increased expenditure in research and development (R&amp;D), expanded business opportunities through trade and foreign direct investment, and intensified import competition are three plausible channels that allow the opening of HSR to spur city innovation.

Does improved transportation promote innovation? evidence from China’s cities