Does a high-speed railway increase offsite subsidiaries' innovation output?

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.

Automated summary

This study finds that opening a high-speed railway in China significantly impacts the innovation output of offsite subsidiaries. The innovation output of these subsidiaries increases after the opening of high-speed railway, as it improves the efficiency of information exchange and resource sharing.