Title: The Role of Bullet Trains in Promoting Intellectual Spillovers in Urban China

Speaker: Professor Siqi Zheng, Tsinghua University

Time: December 16th, 2016 13:30–15:00 

Venue: Conference Room 106B, Zhonghui Building (College of Economics, JNU) 

Abstract: 

In non-democracies the capital city in a nation has "too much power” (Ades and Glaeser, 1995). This has Implications for the misallocation of resources and efficiency wedges. China’s Communist Party chose to build great universities in the superstar cities, and best scholars are in those universities. In a world where transportation costs are high within cities and across cities, relatively few people can access the brilliant scholars and the key pieces of laboratory capital that are housed at these universities. Transportation costs make China's universities “LOCAL public goods". Such an "intellectual monopoly power" can distort the allocation of resources and create inequalities for those scholars who cannot work and live in such cities, and this process re-enforces itself. Declining transportation costs change China’s superstar universities to “REGIONAL public goods”. As 2nd-tier universities are connected to the Superstar cities, the researchers at these 2nd-tier universities can collaborate with the stars, learn from them and use their labs and equipment. Our paper focuses on the role of bullet trains in this process. The rise of an integrated system of cities generates such intellectual spillovers and thus reduces inequality across cities. This means that more human capital can be produced and this has implications for China's overall economic growth –Lower transportation costs make China smarter!