Geographic proximity and corporate investment efficiency: Evidence from high-speed rail construction in China

Applying the difference-in-differences method, we show that high-speed rail (HSR) construction improves investment efficiency in China. The effect is more pronounced for companies with low information trans-parency and low media coverage, suggesting that HSR can mitigate information asymmetry while reduc-ing external regulatory costs. Our analysis also shows that the effect is more powerful for non-state-owned enterprises, high-growth firms, and those companies located in core cities. Overall, our findings suggest that HSR can improve investment efficiency by shortening the travel time between firms and their investors.(c) 2022 Elsevier B.V. All rights reserved.