Network effects of high-speed railways on corporate bond yield spreads: Evidence from China

Hongling Guo, Guochao Wan, Xilinan Wu and Xueqian Song

International Review of Financial Analysis, 2025, vol. 105, issue C

Abstract: In recent years, China's high-speed railway (HSR) network has experienced rapid expansion, transforming not only the country's physical connectivity but also its “soft environment,” with far-reaching implications for corporate financing in the bond market. This study explores how a firm's centrality within the HSR network affects its corporate bond yield spreads, using evidence from Chinese listed firms. The results indicate that firms with higher HSR network centrality benefit from significantly lower bond yield spreads, primarily due to improvements in the information and governance environment, strengthened regional trust, and an enhanced overall business climate. Notably, this effect is more pronounced for non-state-owned enterprises and firms located in non-central cities, highlighting the function of HSR network in alleviating resource allocation imbalances. Our findings contribute to the study of “HSR economics,” offer new insights into corporate finance and firm location research, and enrich the application of social network analysis in the context of HSR development.

Keywords: High-speed railway; Network centrality; Bond yield spread; “Soft environment” (search for similar items in EconPapers)
JEL-codes: G3 R4 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:105:y:2025:i:c:s1057521925003862

DOI: 10.1016/j.irfa.2025.104299

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