Research on the impact of China's high-speed rail opening on enterprise market power: Based on the perspective of market segmentation

Fei Xu, Qian Liu, Xingdong Zheng, Luqi Cao and Mian Yang

Transport Policy, 2022, vol. 128, issue C, 121-137

Abstract: China's regional market segmentation weakens the market mechanism, creates convenience for enterprises with high market share to obtain market power, and will eventually reduce the effectiveness of market competition. However, infrastructure such as high-speed rail (HSR) can break the market segmentation and improve the effectiveness of market competition. In this end, based on the data of Chinese A-share listed companies from 2007 to 2019, this paper constructed a quasi-natural experiment model to examine the relationship between the opening of high-speed railway and the effectiveness of market competition. This paper finds that: (1) the opening of HSR can help restrain the market power of enterprises with high market share; (2) the opening of HSR has a more significant effect on spatially dispersed industries, low capital-intensive enterprises, non-eastern enterprises, manufacturing industries and non-heavy asset industries; (3) the opening of HSR will inhibit the advantages of enterprises with high market share in expanding sales and R&D innovation, thus reducing their market power. The conclusion still holds after considering important factors such as city administrative level, traditional transportation capacity, company stock price crash risk and merger and reorganization (M&A). The findings of this paper mean that the space-time compression effect brought by the opening of HSR will reduce the market power of enterprises brought by market segmentation, and then improve the effectiveness of market competition. Therefore, we should fully tap the value of HSR to help high-quality economic development.

Keywords: Market segmentation; Market power; Micro-market structure; High-speed rail opening; Iceberg cost (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0967070X2200261X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:trapol:v:128:y:2022:i:c:p:121-137

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.tranpol.2022.09.019

Access Statistics for this article

Transport Policy is currently edited by Y. Hayashi

More articles in Transport Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().