Abstract:
This paper provides quasi-experimental evidence on the effects of High-speed rail (HSR) access on local economic performance by focussing on the 2013 opening to passenger traffic of the MedioPadana HSR station in Reggio Emilia, Italy—a non-metropolitan area situated between the major nodes of Milan and Bologna. Using Difference-in-Differences (DiD) as the primary empirical framework, complemented by event-study diagnostics, placebo analyses, explicit spatial exposure specifications, and corroborative Synthetic Control Method (SCM) and Synthetic Difference-in-Differences (SDiD) exercises, and leveraging a rich economic/innovation dataset from 1980 to 2023, the study finds that improved HSR connectivity is associated with a sustained increase in regional Gross Value Added (GVA) of about 9.4%. The effect is particularly pronounced in tradable sectors such as manufacturing and business services, while local non-tradables such as retail and construction experienced relative declines. The mechanism analysis suggests that these gains were driven by increases in labour productivity and scale expansion (rather than capital deepening), as well as in the quality (quantity) of innovation—as measured by forward citation-weighted (unweighted) patent counts. Spatial-exposure estimates are consistent with positive nearby effects, suggesting localised externalities rather than a clear pattern of displacement. By focussing on the 2013 opening to passenger services of a new intermediate in-line HSR stop on the Milan–Bologna corridor, the paper provides novel evidence that HSR can foster growth outside of core metropolitan hubs—provided that local capabilities and institutional conditions are in place. The interpretation rests primarily on the institutional setting, DiD/event-study evidence, placebo diagnostics, and explicit modelling of spatial exposure, while SCM and SDiD provide corroborative evidence based on alternative counterfactual constructions. The findings offer policy-relevant insights into the design of spatially balanced infrastructure strategies, while also suggesting caution in extrapolating from local and nearby gains to aggregate national welfare effects.
