Does RMB exchange rate regime reform decrease corporate risk-taking? Evidence from China

Ling Cui and Deng-Kui Si

Finance Research Letters, 2024, vol. 69, issue PA

Abstract: This paper investigates the impact of the RMB exchange rate regime reform on corporate risk-taking, utilizing Chinese non-financial firm-level data from 2000 to 2022. The results show that the RMB exchange rate regime reform helps decrease corporate risk-taking by decreasing the RMB exchange rate expectations uncertainty, enhancing capital allocation efficiency, and stabilizing the investor structure. These results remain robust to changing variable measurements and estimation methods, removing policy shocks and endogeneity concerns. Our findings highlight the significance of currency liberalization in stabilizing corporate risk attitudes and promoting the improvement of market efficiency.

Keywords: Exchange rate regime reform; Corporate risk-taking; Exchange rate expectation; Capital allocation efficiency; Investor structure (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612324011401
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:finlet:v:69:y:2024:i:pa:s1544612324011401

DOI: 10.1016/j.frl.2024.106111

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

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