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Locational effects and the cost of corporate bonds: the role of information

Author

Listed:
  • Tao Hu
  • Xiaolu Hu
  • Haozhi Huang
  • Jing Shi
  • Hua Wang

Abstract

The public yield spreads of bonds vary widely between Chinese provinces/municipalities, with the average for the highest province double that of the lowest one. Although we find that these patterns are mainly attributable to economic and legal conditions, locational effects like geographic distance and public firm credit ratings also appear to be contributory. We show that these effects are induced by different regional informational environments and are robust to controlling for potential endogenous location choices.

Suggested Citation

  • Tao Hu & Xiaolu Hu & Haozhi Huang & Jing Shi & Hua Wang, 2019. "Locational effects and the cost of corporate bonds: the role of information," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(S2), pages 1977-2016, November.
    • Handle: RePEc:bla:acctfi:v:59:y:2019:i:s2:p:1977-2016
    DOI: 10.1111/acfi.12547
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    Cited by:

    1. Liang, Xiao & Chen, Xiaomeng Charlene, 2024. "Mandatory corporate social responsibility disclosure and financial constraints: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 954-974.
    2. Maoliang Li & Ji Wu & Liansheng Zhang & Liping Zou, 2020. "Board reforms and the cost of equity: International evidence," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(5), pages 4497-4531, December.
    3. Huang, Jin & Jin, Yong & Duan, Yang & She, Yanling, 2023. "Do Chinese firms speculate during high economic policy uncertainty? Evidence from wealth management products," International Review of Financial Analysis, Elsevier, vol. 87(C).
    4. Xin Su & Shengshi Zhou & Rui Xue & Jinfang Tian, 2020. "Does economic policy uncertainty raise corporate precautionary cash holdings? Evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(5), pages 4567-4592, December.

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