Post by CUHK Business School

The latest study by Professor Desmond Tsang, Associate Professor in the Department of Real Estate of the School of Hotel and Tourism Management at CUHK Business School, provides critical insights on how transportation infrastructure extends its benefits far beyond convenience and connectivity. They play a strategic role in fostering greater transparency and bolstering financial market stability. By examining over 1,500 Chinese listed firms, the research establishes that physical distance from financial hubs often leads to less scrutiny and higher stock price crash risks. While virtual engagement is now prevalent, it cannot substitute the soft information gathered during corporate site visits by institutional investors. These findings underscore the strategic importance of transportation infrastructure in narrowing the information gap. In Chinese Mainland, the high-speed rail network has proven this by increasing oversight and ensuring more accurate stock pricing for remote firms. For leaders in inherently remote sectors like agriculture or mining, the directive is clear: prioritise enhanced disclosure and proactive investor engagement to mitigate crash risks. This research highlights how physical connectivity remains indispensable for robust corporate governance and market stability. Read the full article: https://lnkd.in/gX-ry92j Follow us for more #ChinaBusinessKnowledge #CUHKBusinessSchool #LookForward #CUHKResearch #ChinaBusinessKnowledge #BusinessEducation