Assessing the Economic Impacts of High-Speed Rail Operation on Surrounding Areas: Evidence fromIndonesia

Nanda Bagus Rahmawan; Milda Irhamni

doi:10.24843/JEKT.2026.v19.i02.p02

Authors

Nanda Bagus Rahmawan University of Indonesia
Milda University of Indonesia

DOI:

https://doi.org/10.24843/JEKT.2026.v19.i02.p02

Keywords:

High-speed rail, Transportation, economic activity, Economic Growth, Night-time light, Difference-in-Differences

Abstract

As a developing country, Indonesia has successfully built its first high-speed rail (HSR), which is also the first in Southeast Asia. The HSR development forms part of the national transportation infrastructure modernization to enhance connectivity between strategic regions. Research on HSR impacts in Indonesia remains limited; therefore, this study tries to establish the causal impact of HSR development on the economic activities of the surrounding areas. This study uses the smallest administrative units (villages/urban wards) as the unit of analysis and Night-time light (NTL) intensity as a proxy for economic activity. The estimation results indicate that proximity to HSR stations significantly increases local economic activity. The findings are robust to various tests, such as falsification tests, applying Propensity Score Matching (PSM), placebo tests, and using an alternative sample period. This research contributes to the literature on infrastructure development by providing additional evidence on the benefit of infrastructure on local economies.

Author Biography

Milda, University of Indonesia

Master's degree lecturer at the University of Indonesia

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