On the right track? Railroads, industrial development, and distributional effects in historical China

Shiyu Bo; Ting Chen; Cong LIU; Yan Zhou

doi:10.1016/j.jdeveco.2026.103827

On the right track? Railroads, industrial development, and distributional effects in historical China

Shiyu Bo (Co-first author)
, Ting Chen (Co-first author)
, Cong LIU (Co-first author)
, Yan Zhou^* (Co-first author)

^*Corresponding author for this work

Department of Accountancy, Economics and Finance

Research output: Contribution to journal › Journal article › peer-review

Abstract

We present the first quantitative evaluation of the overall impact and distributional effects of railroad access on industrial growth in historical China. Using newly digitized data on railroad expansion and distance to hypothetical railroad networks as instruments, we find that railroad access significantly increased the annual entry of local industrial firms from 1858 to 1936 and industrial output in 1933. However, the effect is highly localized, concentrated in counties within 10 km of railroad lines, and stronger in historical population and transportation centers. Using a causal mediation framework to analyze the textile industry, we find that railroads facilitated firm entry primarily by enhancing market access to manufactured yarn and lowering travel costs for workers and technicians. Further evidence shows that access to railroads promoted technology adoption.

Original language	English
Article number	103827
Number of pages	15
Journal	Journal of Development Economics
Volume	182
Early online date	2 Jun 2026
DOIs	https://doi.org/10.1016/j.jdeveco.2026.103827
Publication status	Published - Jun 2026

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 1 No Poverty
SDG 9 Industry, Innovation, and Infrastructure

User-Defined Keywords

Distributional effects
Historical China
Industrialization
Infrastructure

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10.1016/j.jdeveco.2026.103827

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title = "On the right track? Railroads, industrial development, and distributional effects in historical China",

abstract = "We present the first quantitative evaluation of the overall impact and distributional effects of railroad access on industrial growth in historical China. Using newly digitized data on railroad expansion and distance to hypothetical railroad networks as instruments, we find that railroad access significantly increased the annual entry of local industrial firms from 1858 to 1936 and industrial output in 1933. However, the effect is highly localized, concentrated in counties within 10 km of railroad lines, and stronger in historical population and transportation centers. Using a causal mediation framework to analyze the textile industry, we find that railroads facilitated firm entry primarily by enhancing market access to manufactured yarn and lowering travel costs for workers and technicians. Further evidence shows that access to railroads promoted technology adoption.",

keywords = "Distributional effects, Historical China, Industrialization, Infrastructure",

author = "Shiyu Bo and Ting Chen and Cong LIU and Yan Zhou",

note = "This study was funded by the National Natural Science Foundation of China (Nos. 72273053 and 72373050), the Research Grants Council (RGC) of Hong Kong (GRF Nos. 12503222 and 22502819), the National Social Science Foundation of China (No. 24\&ZD277), the 111 Project of China (No. B18026), and the Fundamental Research Funds for the Central Universities, Zhongnan University of Economics and Law (No. 2722025BJ280). We thank the co-editor, Professor Marco Gonzalez-Navarro, and two anonymous referees for useful suggestions. Publisher Copyright: {\textcopyright} 2026 Elsevier B.V.",

year = "2026",

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doi = "10.1016/j.jdeveco.2026.103827",

language = "English",

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AU - Bo, Shiyu

AU - Chen, Ting

AU - LIU, Cong

AU - Zhou, Yan

N1 - This study was funded by the National Natural Science Foundation of China (Nos. 72273053 and 72373050), the Research Grants Council (RGC) of Hong Kong (GRF Nos. 12503222 and 22502819), the National Social Science Foundation of China (No. 24&ZD277), the 111 Project of China (No. B18026), and the Fundamental Research Funds for the Central Universities, Zhongnan University of Economics and Law (No. 2722025BJ280). We thank the co-editor, Professor Marco Gonzalez-Navarro, and two anonymous referees for useful suggestions. Publisher Copyright: © 2026 Elsevier B.V.

PY - 2026/6

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N2 - We present the first quantitative evaluation of the overall impact and distributional effects of railroad access on industrial growth in historical China. Using newly digitized data on railroad expansion and distance to hypothetical railroad networks as instruments, we find that railroad access significantly increased the annual entry of local industrial firms from 1858 to 1936 and industrial output in 1933. However, the effect is highly localized, concentrated in counties within 10 km of railroad lines, and stronger in historical population and transportation centers. Using a causal mediation framework to analyze the textile industry, we find that railroads facilitated firm entry primarily by enhancing market access to manufactured yarn and lowering travel costs for workers and technicians. Further evidence shows that access to railroads promoted technology adoption.

AB - We present the first quantitative evaluation of the overall impact and distributional effects of railroad access on industrial growth in historical China. Using newly digitized data on railroad expansion and distance to hypothetical railroad networks as instruments, we find that railroad access significantly increased the annual entry of local industrial firms from 1858 to 1936 and industrial output in 1933. However, the effect is highly localized, concentrated in counties within 10 km of railroad lines, and stronger in historical population and transportation centers. Using a causal mediation framework to analyze the textile industry, we find that railroads facilitated firm entry primarily by enhancing market access to manufactured yarn and lowering travel costs for workers and technicians. Further evidence shows that access to railroads promoted technology adoption.

KW - Distributional effects

KW - Historical China

KW - Industrialization

KW - Infrastructure

UR - https://www.scopus.com/pages/publications/105040918614

U2 - 10.1016/j.jdeveco.2026.103827

DO - 10.1016/j.jdeveco.2026.103827

M3 - Journal article

AN - SCOPUS:105040918614

SN - 0304-3878

VL - 182

JO - Journal of Development Economics

JF - Journal of Development Economics

M1 - 103827

ER -

On the right track? Railroads, industrial development, and distributional effects in historical China

Abstract

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