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'Oxford Open Economics' is a fully open access journal publishing research covering all areas of economics, including theoretical, empirical, applied and policy-oriented work, and extending from macroeconomics through microeconomics and all relevant fields.

Economics

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This paper evaluates empirically four types of cost that may result from an international sovereign default: reputational costs, international trade exclusion costs, costs to the domestic economy through the financial system, and political costs to the authorities. It finds that the economic costs are generally significant but short-lived, and sometimes do not operate through conventional channels. The political consequences of a debt crisis, by contrast, seem to be particularly dire for incumbent governments and finance ministers, broadly in line with what happens in currency crises.

Debts, External --- Default (Finance) --- Debts, Public. --- Financial crises --- Bank failures --- Econometric models. --- Failure of banks --- Crashes, Financial --- Crises, Financial --- Financial crashes --- Financial panics --- Panics (Finance) --- Stock exchange crashes --- Stock market panics --- Debts, Government --- Government debts --- National debts --- Public debt --- Public debts --- Sovereign debt --- Debts, Foreign --- Debts, International --- External debts --- Foreign debts --- International debts --- Business failures --- Crises --- Debt --- Bonds --- Deficit financing --- Finance --- Finance, Public --- Repudiation --- International finance --- Investments, Foreign --- Banks and Banking --- Exports and Imports --- Money and Monetary Policy --- International Lending and Debt Problems --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Financial Crises --- International economics --- Monetary economics --- Economic & financial crises & disasters --- Trade credits --- Banking crises --- Credit ratings --- Bank credit --- Debt default --- Credit --- Argentina

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This paper uses firm-level data to document and analyze international bond issuance by Chinese non-financial corporations and the use of the proceeds of issuance. We find that dollar issuance is positively correlated with the differential between domestic and foreign interest rates. This interest rate differential increases the likelihood of dollar bond issuance by risky firms and decreases the likelihood of dollar bond issuance of exporters and profitable firms. Moreover, and most strikingly, we find that risky firms do more inter-firm lending than non-risky firms and that this lending rose significantly after the regulatory shock of 2008-09, when the authorities sought to restrict the financial activities of risky firms. Risky firms try to boost profitability by engaging in speculative activities that mimic the behavior of financial institutions while escaping prudential regulation that limits risk-taking by financial firms.

Zonder onderwerpscode: economie

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Zonder onderwerpscode: economie