The Impact of High-Speed Rail and Central Cities on Enterprise Financing Costs

Abstract

The study of the impact of the high-speed railway (HSR) on enterprise financing costs (EFCs) contributes to understanding the economic impact of transportation facilities, by analyzing the coordinated development of the regional economy and studying the influencing factors in enterprise operation. By using data of Chinese listed companies from 2008 to 2019, this paper analyzes the impact of HSR on EFCs and examines the role of central cities (CCs) in the whole process through methods of the DID model, panel threshold model, PSM-DID, parallel trend test and so on. The research results are as follows: first, HSR led to a significant decrease in the level of corporate debt financing. The regression coefficient of HSR is −0.002, which is significant at a 5% level. Second, there exists a heterogeneous effect of HSR on CCs. Mid-region enterprises suffered more than small enterprises, low-growth enterprises and enterprises with a low return on assets. Third, HSR affects EFCs, which leads to the diffusion effect of CCs, resulting in an increase in EFCs in CCs and a decrease in non-CCs. It was found that there is a single threshold of the panel threshold regression based on per capita GDP, and the regression coefficient of HSR below the threshold is −0.001, which is significant at the 5% level. Additionally, the regression coefficient of HSR above the threshold is 0.002, which is significant at the 1% level. The interaction term and group regression both also confirm the above conclusion. Fourth, the impact of HSR on EFCs is limited by geographic distance. When the geographic distance between a non-CC and a single CC is greater than 500 km, and the total distance between a non-CC and four CCs is greater than 3500 km, the effect of HSR is remarkable. The above conclusions prove the significant impact of HSR on EFCs and reveal the role of CCs and geographic distance in this process. These provide new ideas and evidence for corporate financing management as well as planning for urban development and the HSR network.