China’s strategy for internationalizing the renminbi involves controlling the access of foreign investors to the domestic bond market.
Using the unique institutional feature of government regulations in China, we provide robust evidence that firms with a larger employment size have significantly better access to bond credit.
Inter-jurisdictional competition in a regionally decentralized authoritarian regime distorts local politicians’ incentives in resource allocation among firms from their own city and a competing city.
In this paper, we find that the introduction of specialized bankruptcy courts, which are run by better-trained judges and subject to less government intervention, reduces the cost of bond financing by around 10%.
The recent cross-border regulation tensions between the US and China have exposed many US-listed China Concepts Stocks to substantial delisting risks, forcing them to pursue dual listings on the Hong Kong Stock Exchange.