Geographic proximity and corporate investment efficiency: Evidence from high-speed rail construction in China

•We assess the effect of HSR construction on investment efficiency in China.•Using a DID approach, we find that HSR can improve investment efficiency.•The effect is more pronounced for low transparency and media coverage firms.•The effect is more powerful for non-SOEs, high-growth, and core city firms.•The impact of HSR varies in different macroeconomic environments. Applying the difference-in-differences method, we show that high-speed rail (HSR) construction improves investment efficiency in China. The effect is more pronounced for companies with low information transparency and low media coverage, suggesting that HSR can mitigate information asymmetry while reducing external regulatory costs. Our analysis also shows that the effect is more powerful for non-state-owned enterprises, high-growth firms, and those companies located in core cities. Overall, our findings suggest that HSR can improve investment efficiency by shortening the travel time between firms and their investors.