Abstract
This study uses the standard R2-based method to calculate the stock price synchronicity of listed firms in China's A-share market from 2005 to 2019 and the difference-in-differences (DID) method to examine the impact of high-speed railway (HSR) opening. The results show that HSR opening significantly weakened stock price synchronicity. However, its weakening effect only existed for three years. The mechanism tests indicate that HSR opening enabled analysts as information intermediaries to disseminate more firm-specific information to the market, thereby weakening stock price synchronicity. The heterogeneity tests show that the weakening effect mainly worked in large-cap listed firms and firms in regions with a medium level of financial agglomeration. Additionally, HSR opening could further reduce the cost of equity capital of listed firms by promoting the dissemination of firm-specific information.
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