Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
8954568 | Finance Research Letters | 2018 | 17 Pages |
Abstract
We investigate the causal effects of anti-corruption on the credit risk of local financing vehicles (LFVs) and the pricing of Chengtou bonds (CBs) in China. Difference-in-differences estimates show that anti-corruption decreases LFVs' earnings, thereby increasing LFVs' credit risk. This corresponds to a reduction in LFVs' nonoperating incomes, and the greatest reduction of earnings occurs among LFVs investing in public infrastructure. Finally, we find that credit risk mispricing occurs in the primary market.
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Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Ningyu Qian,