High-Speed Rail and knowledge spillovers: estimation with high-dimensional fixed effects

Previous studies emphasize knowledge spillovers associated with HSR access to core cities but pay less attention to interactions among geographically separated firms within the same subindustry. Using data on Chinese A-share industrial firms from 2003 to 2020, we construct travel-time-based measures of exposure to innovative knowledge embodied in peer firms reachable by HSR. Greater peer knowledge exposure is significantly associated with higher firm productivity within short travel-time windows, and this association is stronger for more convenient HSR connections. These findings are robust to alternative exposure measures, productivity estimators, network definitions, and inference methods, with additional support from placebo tests and event-study analyses. High-dimensional fixed effects absorb shocks common to firms within the same city–subindustry–year cell, so estimation relies on residual variation in HSR-enabled peer exposure within these cells. Under locally linear heterogeneous effects, this specification may also strengthen the plausibility of the conditional unconfoundedness and conditional-exposure modelling assumptions required for a convex-average interpretation of the estimated coefficient.