High-speed rail beyond core hubs: evidence from Italy

Abstract This paper investigates the causal effects of high-speed rail (HSR) access on local economic performance by focusing on the 2013 opening of the MedioPadana HSR station in Reggio Emilia, Italy—a non-metropolitan area situated between the major nodes of Milan and Bologna. Using a multi-method approach that combines Difference-in-Differences (DiD), Synthetic Control Methods (SCM), and Synthetic Difference-in-Differences (SDID), and leveraging a rich economic/innovation dataset from 1980 to 2023, the study finds that improved HSR connectivity led to 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. 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. Spillover effects are observed in nearby provinces, thus suggesting localised positive externalities rather than displacement. By focusing on a politically motivated, quasi-random station placement in an intermediate region, 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 findings offer policy-relevant insights into the design of spatially balanced infrastructure strategies. JEL codes: C21; H54; O18; O31; R11; R42.