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