| By: |
Huang, Anni;
Kishor, N. Kundan |
| Abstract: |
Given the rising importance of non-financial corporate overseas debt issuance
in the overall international capital flow activities, this paper tries to
understand the determinants of corporate overseas bond issuance in 32
countries during the sample period 1993-2015. The results suggest that the
compression in risk premium in advanced economies has encouraged the
corporates in emerging markets to borrow more from international bond markets.
This effect is more prevalent in countries where policy makers impose tighter
international capital control, so that corporates outside financial regulation
serve as surrogate financial intermediaries at the border. Besides, corporates
hold short-term assets in domestic currency as collateral for outstanding
overseas debt, in expecting domestic currency appreciation, a behavior often
phased as price arbitrage or carry trade position. Our results suggest a
potential systematic shift in international financial risk transmission
through corporate fixed-income markets and a possible external shock
transmission channeled through the monetary policy spillover effect. |
| Keywords: |
Corporate Overseas Debt, Global Liquidity, Carry Trade Hypothesis, Monetary Policy Spillover |
| JEL: |
E44 F31 F32 F34 F36 G15 |
| Date: |
2017–10–03 |
| URL: |
http://d.repec.org/n?u=RePEc:pra:mprapa:83476&r=ifn |