Faster than flying: High-speed rail, investors, and firms

Lu Qin, Don M. Autore, Danling Jiang and Hongquan Zhu

Journal of Financial Markets, 2025, vol. 75, issue C

Abstract: We examine the impact of staggered high-speed rail (HSR) connection events between city pairs in China on retail investor behavior and stock market equilibrium outcomes. We find that HSR introductions between investor-firm city pairs promote intercity retail block purchases and cross-city web searches, and increase return comovement among firms in connected cities. Enhanced city connectivity is associated with improved firm valuation, increased turnover, better liquidity, and reduced prevalence of large trades. These effects tend to be driven by connected city pairs with a distance below 1,500 km, for which HSR is faster than flying.

Keywords: High-speed railroad; City connectivity; Investor behavior; Valuation; Liquidity (search for similar items in EconPapers)
JEL-codes: G11 G12 G15 G40 G41 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finmar:v:75:y:2025:i:c:s1386418125000242

DOI: 10.1016/j.finmar.2025.100984

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