The effect of HSR on income from the perspective of common prosperity

Narrowing the income gap is the key to achieving common prosperity, and transportation infrastructure plays a leading role in stimulating economic growth. This study explores the impact of high-speed railway (HSR) on income inequality using a Durbin model and panel data for 30 Chinese provinces from 2007 to 2019. Empirical findings show that income inequality is higher in the western regions and lower in the east. However, HSR enhances transportation accessibility, which generates significant spatial spillovers. In the long term, this leads to a convergence of income gaps among neighbouring provinces and fosters shared prosperity among these regions. Traditional transport infrastructure can also mitigate the widening urban–rural income gap, but not as effectively as HSR. Based on the research results of this paper, the following policy recommendations are proposed: infrastructure construction should shift from an inclusive model to a targeted intervention model to enhance the marginal effect of infrastructure; policymakers should formulate policies compatible with the long-term opening of the HSR network to avoid weakening long-term agglomeration benefits due to institutional delays; and governments should guide inter-provincial cooperation to jointly design project packages and establish cross-provincial commuting fiscal pools that support exogenous technical projects.