The impact of transport network improvements in inter-provincial border counties on county centrality under local protectionism: Breaking barriers or reinforcing the siphon effect?

Interprovincial border regions have long been constrained by administrative boundaries, giving rise to “administrative regional economies” in which local protectionism plays a central role. This study examines whether improvements in transport infrastructure enhance county-level economic centrality by mitigating these administrative barriers. Using panel data for 587 interprovincial border counties from 2000 to 2021, we construct an index of county centrality to capture factor agglomeration capacity and estimate multi-period difference-in-differences models, complemented by instrumental-variable and robustness checks. The results show that: (1) on average, highway openings are associated with a decline in border-county centrality. (2) Transportation integration raises centrality in more open eastern border counties, especially those within roughly 150–200 km of core cities, while effects are muted or negative in western regions and in more remote eastern counties. (3) Mechanism tests show that highway openings are followed by increases in the local SOE share and reduced non-SOE entry where centrality does not improve, consistent with reinforced administrative barriers that impede factor mobility and diminish regional centrality. We hence theoretically capture and provide robust empirical evidence for an “institutional transport paradox”: under specific institutional conditions, reductions in transport costs can become a catalyst for market segmentation rather than an unambiguous force for integration. The findings highlight that dismantling administrative barriers is a precondition for transport-enabled regional coordination and provide guidance for the differentiated design of cross-provincial transport and reform policies.