Gao, Haoyu
The impacts of political uncertainty on public financing costs evidence from anti-corruption investigations in China / Haoyu Gao, Fukang Chen, Yiling Ouyang
Resumen.
Bibliografía.
Our study investigates the impact of local political uncertainty on public financing costs in China. By examining a series of unexpected turnovers of municipal government leaders, we find that the offering yield spreads of municipal corporate bonds increase by around 23 basis points shortly following an anti-corruption investigation and reverse afterward. Indicators show that the anti-corruption investigation escalates the short-term uncertainty about government actions. The pricing effect is stronger for issuers with higher exposure to government policies or lower financial resilience. A transparent information environment alleviates the impact. In contrast, temporary government inefficiency does not explain the increase in yield spreads. Our findings suggest that political uncertainty is a determinant of public financing costs.
HACIENDAS LOCALES
POLITICAS PUBLICAS
INCERTIDUMBRE
CORRUPCION
CHINA
Chen, Fukang
Ouyang, Yiling
Public Choice 0048-5829 v. 198, n. 1-2, January 2024, p. 69-91
The impacts of political uncertainty on public financing costs evidence from anti-corruption investigations in China / Haoyu Gao, Fukang Chen, Yiling Ouyang
Resumen.
Bibliografía.
Our study investigates the impact of local political uncertainty on public financing costs in China. By examining a series of unexpected turnovers of municipal government leaders, we find that the offering yield spreads of municipal corporate bonds increase by around 23 basis points shortly following an anti-corruption investigation and reverse afterward. Indicators show that the anti-corruption investigation escalates the short-term uncertainty about government actions. The pricing effect is stronger for issuers with higher exposure to government policies or lower financial resilience. A transparent information environment alleviates the impact. In contrast, temporary government inefficiency does not explain the increase in yield spreads. Our findings suggest that political uncertainty is a determinant of public financing costs.
HACIENDAS LOCALES
POLITICAS PUBLICAS
INCERTIDUMBRE
CORRUPCION
CHINA
Chen, Fukang
Ouyang, Yiling
Public Choice 0048-5829 v. 198, n. 1-2, January 2024, p. 69-91