High-speed rail construction, heterogeneity, and firm value in Chinese SMEs

Using the difference-in-differences (DID) method, we demonstrate that high-speed rail (HSR) construction enhances the value of Chinese small and medium enterprises (SMEs) throughout 2005-2019, particularly in the Environmental Protection IT, Manufacturing, and second-tier cities. The effect is largely driven by the Manufacturing industry, which accounts for 74% of the sample. Mechanistic analysis shows that HSR boosts analyst coverage and lowers information acquisition costs for institutional investors, reducing information asymmetry and enhancing firm value.