Exploiting the staggered expansion of China's passenger-dedicated high-speed rail (HSR) network, we study the relationship between HSR connection and firm performance. By highlighting the importance of firm location and face-to-face interactions, we test the differential impact of HSR connection on the performance and growth of firms that differ in their dependence on communication and inter-city travel as production inputs. Our results confirm that firms in communication-intensive and travel-dependent industries benefit more from the operation of the HSR. Moreover, in examining the specific mechanisms at work, we find evidence that the HSR promotes firm performance and growth for the communication-intensive and travel-dependent through increased analyst attention, productivity boosts, and market expansions. Our findings imply that face-to-face interactions, through facilitating the exchange and acquisition of information, are potentially important for our understanding of “local (home) bias” of investment documented in the literature.

We assemble a property-level panel of appraiser-reported attributes associated with 4.6 million loan applications from 2013 to 2017 to test whether attributes were consistently reported. Appraisers have an incentive to misreport property attributes to justify higher appraised values to ensure that associated mortgage loans are approved. We focus on property transactions with multiple sets of attributes reported by the same appraiser within four quarters and find evidence consistent with an intent to inflate valuations through attribute misreporting. We find that strategic misreporting of attributes is prevalent across markets, and that highly leveraged borrowers whose appraisals had inconsistently reported attributes were 9.8 percent more likely to become seriously delinquent in their loan payments.