IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v182y2026ics0967070x26001071.html

The role of information exchange and financial services in cross-regional investment: A study on the impact mechanism of high-speed rail connectivity

Author

Listed:
  • Zhoushun, Yu
  • Yushu, Zhang
  • Lili, Tao

Abstract

The rapid construction of high-speed rail (HSR) in China has significantly reduced the costs associated with the circulation of factors and has profoundly influenced the cross-regional investment behavior of enterprises. The primary objective of this paper is to examine how bilateral high-speed rail connectivity impacts the cross-regional mergers and acquisitions (M&A) investments of manufacturing firms by facilitating the exchange of information and enhancing financial linkages between regions. Using data from the BVD-Zephyr M&A transaction database regarding domestic cross-regional M&A activities and financial information from the BVD-Oriana Asia-Pacific Corporate Analysis Database, we constructed a dataset comprising pairs of acquiring firms and target cities within the period from 2013 to 2021. An empirical analysis was conducted employing a staggered difference-in-differences (DID) methodology. The findings indicate that, following the establishment of bilateral high-speed rail connectivity, there was a notable increase in both the quantity and value of enterprise M&A investments between cities. Mechanism analysis reveals that high-speed rail connectivity alleviates information asymmetries by fostering inter-regional information exchange and strengthening financial services relationships. This, in turn, aids firms in overcoming financing and operational challenges during cross-regional mergers and acquisitions. Furthermore, as a crucial transportation mode for medium- and short-distance travel, high-speed rail has a more pronounced stimulating effect on investments in neighboring cities, particularly for private enterprises facing significant financing constraints. This study deepens the understanding of the relationship between the opening of high-speed rail services between cities and the cross-regional investments of firms, while also providing policy implications for accelerating the development of a unified domestic market.

Suggested Citation

  • Zhoushun, Yu & Yushu, Zhang & Lili, Tao, 2026. "The role of information exchange and financial services in cross-regional investment: A study on the impact mechanism of high-speed rail connectivity," Transport Policy, Elsevier, vol. 182(C).
    • Handle: RePEc:eee:trapol:v:182:y:2026:i:c:s0967070x26001071
    DOI: 10.1016/j.tranpol.2026.104097
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X26001071
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tranpol.2026.104097?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Matthias Flückiger & Erik Hornung & Mario Larch & Markus Ludwig & Allard Mees, 2022. "Roman Transport Network Connectivity and Economic Integration," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(2), pages 774-810.
    2. Wu, Mingqin & Yu, Linhui & Zhang, Junsen, 2023. "Road expansion, allocative efficiency, and pro-competitive effect of transport infrastructure: Evidence from China," Journal of Development Economics, Elsevier, vol. 162(C).
    3. Levinson, David M., 2012. "Accessibility impacts of high-speed rail," Journal of Transport Geography, Elsevier, vol. 22(C), pages 288-291.
    4. Tim Marshall, 2014. "The European Union and Major Infrastructure Policies: The Reforms of the Trans-European Networks Programmes and the Implications for Spatial Planning," European Planning Studies, Taylor & Francis Journals, vol. 22(7), pages 1484-1506, July.
    5. Christian Fieberg & Kerstin Lopatta & Thomas Tammen & Sebastian A. Tideman, 2021. "Political affinity and investors' response to the acquisition premium in cross‐border M&A transactions — A moderation analysis," Strategic Management Journal, Wiley Blackwell, vol. 42(13), pages 2477-2492, December.
    6. Yadong Luo & Mike W Peng, 1999. "Learning to Compete in a Transition Economy: Experience, Environment, and Performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(2), pages 269-295, June.
    7. Zhang, Mingyue & Peng, Donghui, 2023. "The impact of digital transformation on corporate cross-border mergers and acquisitions," Finance Research Letters, Elsevier, vol. 58(PB).
    8. Komei Sasaki & Tadahiro Ohashi & Asao Ando, 1997. "High-speed rail transit impact on regional systems: does the Shinkansen contribute to dispersion?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(1), pages 77-98.
    9. Eliana La Ferrara & Alberto Chong & Suzanne Duryea, 2012. "Soap Operas and Fertility: Evidence from Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 4(4), pages 1-31, October.
    10. Kuang, Chun & Liu, Zijie & Zhu, Wenyu, 2021. "Need for speed: High-speed rail and firm performance," Journal of Corporate Finance, Elsevier, vol. 66(C).
    11. Suk, Inho & Wang, Mengmeng, 2021. "Does target firm insider trading signal the target's synergy potential in mergers and acquisitions?," Journal of Financial Economics, Elsevier, vol. 142(3), pages 1155-1185.
    12. Chen, Zhenhua & Haynes, Kingsley E., 2017. "Impact of high-speed rail on regional economic disparity in China," Journal of Transport Geography, Elsevier, vol. 65(C), pages 80-91.
    13. Alperovych, Yan & Cumming, Douglas & Czellar, Veronika & Groh, Alexander, 2021. "M&A rumors about unlisted firms," Journal of Financial Economics, Elsevier, vol. 142(3), pages 1324-1339.
    14. Ortega, Emilio & López, Elena & Monzón, Andrés, 2012. "Territorial cohesion impacts of high-speed rail at different planning levels," Journal of Transport Geography, Elsevier, vol. 24(C), pages 130-141.
    15. James E. Rauch & Alessandra Casella, 2003. "Overcoming Informational Barriers to International Resource Allocation: Prices and Ties," Economic Journal, Royal Economic Society, vol. 113(484), pages 21-42, January.
    16. Wu, Yizhong & Lee, Chien-Chiang & Lee, Chi-Chuan & Peng, Diyun, 2022. "Geographic proximity and corporate investment efficiency: Evidence from high-speed rail construction in China," Journal of Banking & Finance, Elsevier, vol. 140(C).
    17. Yatang Lin & Yu Qin & Johan Sulaeman & Jubo Yan & Jialiang Zhang, 2023. "Expanding Footprints: The Impact of Passenger Transportation on Corporate Locations," Review of Finance, European Finance Association, vol. 27(3), pages 1119-1154.
    18. Kang, Meiling & Li, Yucheng & Zhao, Zhongkuang & Song, Min & Yi, Jun, 2023. "Travel costs and inter-city collaborative innovation: Evidence of high-speed railway in China," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 286-302.
    19. Kose John & Qianru Qi & Jing Wang, 2020. "Bank Integration and the Market for Corporate Control: Evidence from Cross-State Acquisitions," Management Science, INFORMS, vol. 66(7), pages 3277-3294, July.
    20. Andrew B. Bernard & Andreas Moxnes & Yukiko U. Saito, 2019. "Production Networks, Geography, and Firm Performance," Journal of Political Economy, University of Chicago Press, vol. 127(2), pages 639-688.
    21. Duan, Liaoliao & Sun, Weizeng & Zheng, Siqi, 2020. "Transportation network and venture capital mobility: An analysis of air travel and high-speed rail in China," Journal of Transport Geography, Elsevier, vol. 88(C).
    22. Wheeler, David & Mody, Ashoka, 1992. "International investment location decisions : The case of U.S. firms," Journal of International Economics, Elsevier, vol. 33(1-2), pages 57-76, August.
    23. Benjamin Faber, 2014. "Trade Integration, Market Size, and Industrialization: Evidence from China's National Trunk Highway System," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(3), pages 1046-1070.
    24. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zheng, Longfei & Wu, Shuping & Zhang, Anming & Zhou, Zhengyi, 2026. "High-speed rail and employment disparity: A sectoral perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 209(C).
    2. Hiau Looi Kee & Enze Xie & Xu,Mingzhi, 2024. "Firm Linkages and Domestic Value Added in Exports : Moving up the Global Value Chains with High-Speed Railways," Policy Research Working Paper Series 10985, The World Bank.
    3. Jiao, Jingjuan & Zhao, Hongyu & Lyu, Guowei, 2024. "How does high-speed rail affect off-site investments? Evidence from the Yangtze River Delta, China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 181(C).
    4. Chen, Jiahui & Shi, Jinchuan & Wang, Zheng & Zeng, Shirong & Zhou, Zhuo, 2025. "The power of wings: How air connections fuel cross-regional collaboration in China?," China Economic Review, Elsevier, vol. 92(C).
    5. Yuan, Bozong & Zhang, Xinzhi, 2025. "Restoring inland prosperity: The impact of the New International Land-Sea Corridor on corporate internationalization and regional wealth gaps," Regional Science and Urban Economics, Elsevier, vol. 114(C).
    6. Zheng, Xuyuan & Lin, Qinglin & Xie, Gang & Yu, Xiaohua & Liu, Chengfang, 2026. "The Road to Healthier Diet: Benefits of the “Five Vertical and Seven Horizontal” National Trunk Highway System in China," Journal of Health Economics, Elsevier, vol. 107(C).
    7. Wei, Xiaokun & Ruan, Qingsong & Lv, Dayong & Wu, Youyi, 2022. "Transportation infrastructure and bond issuance credit spread: Evidence from the Chinese high-speed rail construction," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 30-47.
    8. Liu, Jingyang & Yang, Haoran, 2023. "Income allocation and distribution along with high-speed rail development in China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 175(C).
    9. Mohsen Momenitabar & Zhila Dehdari Ebrahimi & Mohammad Arani, 2020. "A Systematic and Analytical Review of the Socioeconomic and Environmental Impact of the Deployed High-Speed Rail (HSR) Systems on the World," Papers 2003.04452, arXiv.org, revised Mar 2020.
    10. Xinyuan Wang & Daisheng Tang & Yahong Liu & Tao Bu, 2023. "The impact of high-speed railway on labor market between the North and South: evidence from China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 71(2), pages 487-515, October.
    11. Liu, Xiaoying & Wang, Yujing & Li, Meng & Gao, Haoyu, 2024. "The importance of speed to corporate financial asset holdings: Evidence from high-speed rail," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    12. Liu, Mengsha & Jiang, Yan & Wei, Xiaokun & Ruan, Qingsong & Lv, Dayong, 2023. "Effect of high-speed rail on entrepreneurial activities: Evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    13. Chu, Xiaoling & Lo, Kin & Tsang, Desmond, 2026. "Needed but not there: Firm location, corporate site visits, transportation, and stock price crash risk," Regional Science and Urban Economics, Elsevier, vol. 118(C).
    14. Liaoliao Duan & Dongxiao Niu & Weizeng Sun & Siqi Zheng, 2021. "Transportation infrastructure and capital mobility: evidence from China’s high-speed railways," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(3), pages 617-648, December.
    15. Ouyang, Caiyue & Xiong, Jiacai & Liu, Li & Yao, Jun, 2024. "Geographic proximity and trade credit: Evidence from a quasi-natural experiment," Journal of Corporate Finance, Elsevier, vol. 84(C).
    16. Yan, Sen & Ai, Kexin, 2026. "High-speed rail connectivity and supply chain information symmetry: insights from the bullwhip effect," Transport Policy, Elsevier, vol. 178(C).
    17. Yan, Sen & Sun, Xinyu & Zhang, Yurong, 2024. "High-speed railway ripples on the greenness: Insight from urban green vegetation cover," Transportation Research Part A: Policy and Practice, Elsevier, vol. 179(C).
    18. Lan, Xiujuan & Hu, Zheneng & Wen, Chuanhao, 2023. "Does the opening of high-speed rail enhance urban entrepreneurial activity? Evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 88(C).
    19. Lu, Mengting & Shu, Haibing, 2026. "The impact of transportation network development on firm investment decisions: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 95(C).
    20. Wu, Bingyu & Levinson, David M., 2024. "A multi-modal analysis of the effect of transport on population and productivity in China," Journal of Transport Geography, Elsevier, vol. 116(C).

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:182:y:2026:i:c:s0967070x26001071. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.