Internationalizing Like China

42 Pages Posted: 8 Aug 2022 Last revised: 21 Nov 2024

See all articles by Christopher Clayton

Christopher Clayton

Yale School of Management

Amanda Dos Santos

Columbia University - Columbia Business School

Matteo Maggiori

Stanford Graduate School of Business

Jesse Schreger

Columbia University - Columbia Business School, Economics; National Bureau of Economic Research (NBER)

Date Written: August 2022

Abstract

We empirically characterize how China is internationalizing its bond market by staggering the entry of different types of foreign investors into its domestic market and propose a dynamic reputation model to explain this strategy. Our framework rationalizes China’s strategy as trying to build credibility as a safe issuer while reducing the cost of capital flight. We use our framework to shed light on China’s response to episodes of capital outflows.

Suggested Citation

Clayton, Christopher and Dos Santos, Amanda and Maggiori, Matteo and Schreger, Jesse, Internationalizing Like China (August 2022). NBER Working Paper No. w30336, Available at SSRN: https://ssrn.com/abstract=4184323

Christopher Clayton (Contact Author)

Yale School of Management ( email )

165 Whitney Ave
New Haven, CT 06511

Amanda Dos Santos

Columbia University - Columbia Business School ( email )

665 W 130th St
New York, NY 10027
United States

Matteo Maggiori

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, 94305
United States

Jesse Schreger

Columbia University - Columbia Business School, Economics ( email )

420 West 118th Street
New York, NY 10027
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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