Does a high-speed railway increase offsite subsidiaries’ innovation output?

ABSTRACT

This study investigates the impact of opening a high-speed railway (HSR) on the innovation output of offsite subsidiaries in China. Our findings suggest that the innovation output of offsite subsidiaries increases significantly after the opening of HSR between the cities in which the listed firms and their subsidiaries are located, and the results are robust after a series of robustness checks. Hence, the spatiotemporal squeezing effect generated by opening HSR significantly improves the efficiency of information exchange and resource sharing between parent and subsidiary companies, which greatly promotes the innovation output of offsite subsidiaries.

KEYWORDS:

• High-speed railway
• innovation output
• offsite subsidiary
• knowledge spillover effect

JEL CLASSIFICATION:

• G39
• D83
• R49

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Flow of factors includes but is not limited to flow of information, capital, labour, etc.

² We also do univariate test and the results are consistent with the hypothesis.

Additional information

Funding

The work was supported by the National Natural Science Foundation of China [71572009,71872010]; National Social Science Funds of China [21FGLB049]