Can Transport Infrastructure Reduce Share Price Synchronicity?

"If you want to be rich,build roads." Transportation infrastructure construction has always been a competitive investment project in the development process of all countries in the world.According to statistics,transportation projects accounted for about 15%of the loan of the world bank from 2013 to 2017.Studies have shown that transportation infrastructure construction has a profound impact on both the macro economy and micro enterprises.As a new type of transportation,high-speed railway has the advantages of fast speed,large volume and high on-time rate in promoting the transportation and transmission of people and information,and has become a new driving point for China’s economic revitalization and development.The opening of high-speed railway reduces the space and time distance,reduces the difficulty and cost of information search,and helps external information demanders to obtain private information of enterprises through field research.This rare quasi-natural experiment provides an opportunity for the research on pricing efficiency of capital market.As an indicator that can effectively measure the pricing efficiency of the capital market,stock price synchronization is of self-evident importance,which has attracted the attention of many scholars in the field of finance and finance,and relevant papers emerge one after another.Compared with the mature capital market,in the emerging capital market,the degree of private information reflected in the stock price is relatively low,which will make the market resource allocation efficiency low.China’s capital market is in the stage of "emerging and transition",the information efficiency of the capital market is low,and the synchronicity of stock prices is "stable" in the forefront of the world.The capital market cannot play the role of resource allocation effectively,and it is difficult to meet the increasingly fierce international competition.Under the background of the country’s gradual deepening of financial system reform,it is of great theoretical and practical significance to systematically explore the influence of objective environmental changes such as transportation infrastructure on stock price synchronization.In this paper,the quasi-natural experiment of high-speed railway opening was used to study a-share listed companies in Shanghai and shenzhen from 2007 to 2018.On the basis of manually collecting the year data of high-speed railway opening in each prefecture-level city,the author studied the impact of high-speed railway opening on the capital market from the perspective of stock price synchronization using the double difference method.The structure of this paper is as follows:the first part is the introduction.Based on the rapid development of high-speed railway,the comprehensive national policy expounds the research background and significance of this paper.Then it introduces the research contents,research methods and innovation points of this paper;The second part is the theoretical basis and literature review.This part first summarizes the concepts and theoretical basis related to this study,and then,based on the integration of domestic and foreign scholars’ research,introduces and evaluates the literature on the economic consequences of the opening of high-speed rail and the factors affecting the synchronicity of stock prices;The third part is the institutional background and research hypothesis.Firstly,it briefly summarizes the development of high-speed railway in China,and then expounds the logic that high-speed railway affects the synchronicity of stock price,finally,the paper differentiates the influence of the opening of high-speed railway on stock price synchronization under different circumstances;The fourth part is research design.This part mainly introduces sample selection range,data sources,research variables and regression model;The fifth part is the analysis of empirical results.This part includes descriptive statistics,correlation analysis,univariate analysis,and multiple regression analysis,and endogeneity test and robustness test for multiple regression results;The sixth part is the analysis of action mechanism.The analysis is mainly from three cross sections of analysts,institutional investors and news media;The seventh part is the research conclusion and policy suggestion.The thesis is summarized according to the demonstration results,and relevant policy Suggestions are put forward.Finally,the research limitations are considered.The research results of this paper find that:(1)The opening of high-speed railway reduces the stock price synchronization of enterprises along the route by 12.8%,which is still stable after controlling the endogenous problem.(2)In cities with poor initial traffic conditions and less developed areas,the opening of high-speed rail has a more significant impact on stock price synchronization.(3)The higher the grade of the high-speed railway station and the middle and later stages of the high-speed railway development,the more significant the impact on the stock price synchronization.(4)The mechanism of action study found that the high-speed railway reduces the synchronicity of stock prices by improving the efficiency of the collection and use of private information by external information intermediaries such as analysts,institutional investors and news media.Specifically,the high-speed opening compression of space and time distance reduce degree of difficulty of information search and the market participants and information search cost,enhances the analysts,institutional investors and the news media frequently for enterprises to carry out field investigation and study motivation,more a reflection of quality information in the market and investors based on the private information of the carry trade as a result,the company quality information reflected in stock prices quickly,significantly reduce the location of the listed company’s share price synchronicity.This paper,from a new perspective,provides a useful supplement to the research on the formation mechanism of stock price synchronization in China,and reveals the role of transportation infrastructure construction in the capital market,which is conducive to optimizing the efficiency of resource allocation,improving the market pricing mechanism,and promoting the healthy and stable operation of the capital market.