Virtual Lecture: Corporate foreign bond issuance and interfirm loans in China

We use firm-level data to analyze international bond issuance by Chinese non-financial corporations, distinguishing those by sectors classed as ‘risky’.

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Yi Huang (Fudan University)

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via Zoom

Zur Person

Yi Huang is Professor of Finance at Fudan University. Prior to joining Fudan in 2021, Professor Huang was Pictet Chair in Finance and Development and associate professor at the Graduate Institute of International and Development Studies (Geneva, Switzerland) and Academic Fellow at the Luohan Academy. His research consists of international macro and finance, macro and finance and digital economics and fintech and entrepreneurship. His recent research focuses on the influence of corporation’s financing and investment to financial market in the era of globalisation.

We use firm-level data to analyze international bond issuance by Chinese non-financial corporations, distinguishing those by sectors classed as ‘risky’. Dollar issuance is positively correlated with the differential between domestic and foreign interest rates, and this effect is particularly strong for firms in risky sectors. Strikingly, firms in risky sectors use the proceeds to do more inter-firm lending than firms in non-risky sectors. Moreover, this lending rose significantly after the authorities sought to restrict the financial activities of risky firms in 2008- 09. Firms in risky sectors compound risk by engaging in speculative activities that mimic the behavior of financial institutions while escaping prudential regulation.

To join the lecture via ZOOM, please contact Alessandro Sardone.