Transportation and Stock Mispricing: Evidence from High-Speed Rail Development in China

This study exploits the opening of high-speed rail (HSR) in China to estimate the impact on stock mispricing using staggered differences-in-differences model. The results show that HSR significantly mitigates stock mispricing, as robustly checked by parallel trend and placebo tests. We further detect the heterogeneity across regions and ownerships and supply a perspective from information and capital flow linking stock mispricing with HSR. The findings propose a new thinking for optimizing HSR development and provide a supplement for information exchange among analysts, investors, and companies under a developing financial system, and help correct mispricing of the capital market.