Beyond the Tracks: Effect of High-Speed Rail Construction on Corporate Debt Maturity

Long-term financing is highly important for enterprises and macroeconomic growth. Using the Chinese high-speed rail (HSR) construction as an exogenous shock to geographic proximity, this article conducts staggered difference-in-differences regressions to investigate the relationship between geographic proximity variation and corporate debt maturity. Results show that HSR construction leads to a greater long-term debt ratio, suggesting that improved geographic proximity facilitates firms’ access to long-term debt and improves corporate debt maturity. This beneficial effect is greater for firms with severe information asymmetry, confirming the “information mechanism” that increased geographic proximity enhances firms’ information environment and thereby strengthens corporate borrowing capacities. We also empirically rule out some alternative explanations (“governance mechanism” and “market expansion mechanism”). This study contributes to the literature by demonstrating that large-scale infrastructure projects can extend their benefits beyond physical transportation to substantially improve firms’ financing environments.