Could the introduction of high-speed railway inhibit the IPO underpricing in China?

This study examines the high-speed railway (hereinafter referred to as ‘HSR’)’s impact on initial public offering (hereinafter referred to as ‘IPO’) underpricing by using a large sample of IPO firms in China. By using the reduced-form difference-in-difference method, we find that the introduction of HSR significantly reduces the IPO underpricing, and the effect is more pronounced in the firms with auditors from different regions, and the firms in regions with better institutional environment.