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.
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.