Why do firms issue U.S. dollar bond abroad? Evidence from Chinese non-financial listed corporations

Su Chen and Lu Yin

Research in International Business and Finance, 2022, vol. 60, issue C

Abstract: This paper introduces the availability of domestic and foreign markets into the corporate heterogeneous currency financing model and concludes that arbitrage motivation, limited financing in the domestic market, and easy access to foreign markets encourages firms to issue U.S. dollar bonds. Using a comprehensive database covering bond issuances by Chinese firms in domestic and offshore markets from 2011 to 2017, we find that the empirical results support the above conclusion and show that firms with higher leverage rates tend to issue U.S. dollar bonds, while firms with more exposure to foreign exchange risk or state-owned enterprises do not tend to issue U.S. dollar bonds. Such results provide important implications to both financial institutions and regulatory agencies.

Keywords: Non-Financial Listed Corporations; Issuing U.S. Dollar Bond; Offshore Bond Market; Motivation (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S027553192100221X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:60:y:2022:i:c:s027553192100221x

DOI: 10.1016/j.ribaf.2021.101600

Access Statistics for this article

Research in International Business and Finance is currently edited by T. Lagoarde Segot

More articles in Research in International Business and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().