Does High-Speed Railway Opening Improve the M&A Behavior?

Abstract

High-speed railway (HSR) shortens the spatial and temporal distance between regions and has a profound impact on regional economy and enterprise decision-making. This study investigates the impact of opening a high-speed railway (HSR) on enterprises’ mergers and acquisitions (M&A) behavior in China. Our findings suggest that the opening of HSR promotes the M&A activities of listed companies, and the opening of non-intercity HSR has a more obvious effect on the promotion of M&A decisions of enterprises. The results were robust after a series of robustness checks. Hence, the spatiotemporal squeezing effect generated by opening an HSR significantly improves the efficiency of information exchange and decreases the transaction costs of listed companies, which greatly promotes the M&A decisions of enterprises.