Short Term Global Capital Flow and Local Cost of Debt
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| Title | Short Term Global Capital Flow and Local Cost of Debt
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| Author | Han Qian,Yuan Yufei and Wu Boqiang |
| Organization | XIAMEN University |
| Email | hanqian@gmail.com；yyuanwise@gmail.com；wuboqiang@gmail.com |
| Key Words | Emerging Markets, Short-term Global Capital Flow, Cost of Debt; Financial Globalization |
| Abstract | Despite the expanding international financial integration, there is a lack of rigorous research on how the global flow of capital influences the recipient countries, especially emerging markets. We explore this topic using a data set of the corporate financing of Chinese publicly listed firms. The results of our analysis indicate that short-term global capital flow (SGCF) significantly affects the cost of debt for Chinese firms, and the regional heterogeneity of the effect is related to the openness of the cities in which the firms are located. This finding suggests that SGCF affects the liquidity of the local banking sectors of the cities into which it flows. We further examine the effect of SGCF on different industries and find that the cost of debt in the manufacturing sector is the most sensitive to SGCF. |
| Serial Number | WP942 |
| Time | 2015-11-03 |
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