IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v88y2023icp154-177.html
   My bibliography  Save this article

How does high-speed railway opening affect stock price synchronicity?

Author

Listed:
  • Zhou, Lei
  • Wang, Yuansheng
  • Bai, Caiquan
  • Xiao, Weiwei

Abstract

This study uses the standard R2-based method to calculate the stock price synchronicity of listed firms in China's A-share market from 2005 to 2019 and the difference-in-differences (DID) method to examine the impact of high-speed railway (HSR) opening. The results show that HSR opening significantly weakened stock price synchronicity. However, its weakening effect only existed for three years. The mechanism tests indicate that HSR opening enabled analysts as information intermediaries to disseminate more firm-specific information to the market, thereby weakening stock price synchronicity. The heterogeneity tests show that the weakening effect mainly worked in large-cap listed firms and firms in regions with a medium level of financial agglomeration. Additionally, HSR opening could further reduce the cost of equity capital of listed firms by promoting the dissemination of firm-specific information.

Suggested Citation

  • Zhou, Lei & Wang, Yuansheng & Bai, Caiquan & Xiao, Weiwei, 2023. "How does high-speed railway opening affect stock price synchronicity?," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 154-177.
  • Handle: RePEc:eee:reveco:v:88:y:2023:i:c:p:154-177
    DOI: 10.1016/j.iref.2023.06.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056023001776
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.iref.2023.06.009?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 search for a different version of it.

    References listed on IDEAS

    as
    1. Gupta, Kartick & Krishnamurti, Chandrasekhar & Tourani-Rad, Alireza, 2013. "Is corporate governance relevant during the financial crisis?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 23(C), pages 85-110.
    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. Ichiro Iwasaki, 2015. "Global Financial Crisis, Ownership Change, and Corporate Governance Evolution Firm-Level Evidence from Russia," KIER Working Papers 925, Kyoto University, Institute of Economic Research.
    2. Sadok El Ghoul & Omrane Guedhami & Robert Nash & He (Helen) Wang, 2022. "Economic policy uncertainty and insider trading," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 45(4), pages 817-854, December.
    3. Li, Wanli & Li, Yue & Jacoby, Gady & Wu, Zhenyu, 2022. "Antidumping, firm performance, and subsequent responses," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 76(C).
    4. Iwasaki, Ichiro & 岩﨑, 一郎, 2016. "The Evolution of Corporate Governance in the Global Financial Crisis : The Case of Russian Industrial Firms," CEI Working Paper Series 2016-7, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    5. Abdallah, Abed Al-Nasser & Ismail, Ahmad K., 2017. "Corporate governance practices, ownership structure, and corporate performance in the GCC countries," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 46(C), pages 98-115.
    6. Narayan, Paresh Kumar & Phan, Dinh Hoang Bach & Bannigidadmath, Deepa, 2017. "Is the profitability of Indian stocks compensation for risks?," Emerging Markets Review, Elsevier, vol. 31(C), pages 47-64.
    7. Rosati, Nicoletta & Bellia, Mario & Matos, Pedro Verga & Oliveira, Vasco, 2020. "Ratings matter: Announcements in times of crisis and the dynamics of stock markets," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 64(C).
    8. Husam Aldamen & Keith Duncan & Simone Kelly & Ray McNamara, 2020. "Corporate governance and family firm performance during the Global Financial Crisis," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(2), pages 1673-1701, June.
    9. Santiago Lago-Peñas & Elena Rivo-López & Mónica Villanueva-Villar, 2016. "On the relationship between corporate governance and value creation in an economic crisis: Empirical evidence for the Spanish case," Working Papers. Collection C: Family business 1602, Universidade de Vigo, GEN - Governance and Economics research Network.
    10. Reddy, Kotapati Srinivasa, 2015. "The impact of the global financial crisis on border-crossing mergers and acquisitions: A continental/industry analysis," MPRA Paper 63563, University Library of Munich, Germany, revised 2015.
    11. Subhan Ullah & Sardar Ahmad & Saeed Akbar & Devendra Kodwani & Jane Frecknall‐Hughes, 2021. "Governance disclosure quality and market valuation of firms in UK and Germany," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5031-5055, October.
    12. Michael Machokoto & Geofry Areneke & Davis Nyangara, 2021. "Financial conservatism, firm value and international business risk: Evidence from emerging economies around the global financial crisis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 4590-4608, July.
    13. Farag, Hisham & Meng, Qingwei & Mallin, Chris, 2015. "The social, environmental and ethical performance of Chinese companies: Evidence from the Shanghai Stock Exchange," International Review of Financial Analysis, Elsevier, vol. 42(C), pages 53-63.
    14. Narendar Rao & K. Reddy, 2015. "The impact of the global financial crisis on cross-border mergers and acquisitions: a continental and industry analysis," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 309-341, December.
    15. Abdulateif A. Almulhim & Abdullah A. Aljughaiman & Abdulaziz S. Al Naim & Abdulmohsen K. Alosaimi, 2024. "Effects of Risk Committee on Agency Costs and Financial Performance," JRFM, MDPI, vol. 17(8), pages 1-19, August.
    16. Aymen Mselmi & Boutheina Regaieg, 2017. "Banking Institutions Governance and Stock Market and Financial Performance," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 752-759.
    17. Aymen Mselmi & Boutheina Regaieg, 2017. "Managers' Entrenchment, Governance and Bank Performance," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 233-246.
    18. Tiago Miguel Sá & Elisabete Duarte Neves & Cristina Gonçalves Góis, 2017. "The influence of corporate governance on changes in risk following the global financial crisis: evidence from the Portuguese stock market," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 21(4), pages 841-878, December.
    19. Achraf Haddad & Anis El Ammari & Abdelfettah Bouri, 2019. "Are the Islamic Banks Really more Profitable than the Conventional Banks in a Financial Stable Period?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(9), pages 994-1018, September.
    20. Miranda Tanjung, 2020. "A cross-firm analysis of corporate governance compliance and performance in Indonesia," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 35(5), pages 621-643, February.

    More about this item

    Keywords

    HSR opening; Stock price synchronicity; Firm-specific information dissemination; Analyst coverage;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • R49 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Other

    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:reveco:v:88:y:2023:i:c:p:154-177. 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/locate/inca/620165 .

    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.