Author: | Wang, Jing |
Title: | Economic policy uncertainty, local business environment and credit |
Advisors: | Xu, Xinpeng (AF) |
Degree: | D.B.A. |
Year: | 2022 |
Subject: | China -- Economic policy Bonds -- China Bond market -- China Hong Kong Polytechnic University -- Dissertations |
Department: | Faculty of Business |
Pages: | i, 70, [17] pages : color illustrations |
Language: | English |
Abstract: | Does economic policy uncertainty (EPU) influence the cost of credit in China? To answer this question, I develop a novel measure of EPU at the province-level in China using Python techniques in newspaper text scraping of keywords from 29 provincial newspapers. Then, I use this measure to examine how EPU affects bond spread in China's offshore dollar bond market during 2016–2020. I find that EPU has a sizable effect on bond spread. In other words, the higher the EPU a firm faces, the wider the spread of its offshore dollar bond will be. However, I do not find evidence that more favorable provincial business environments (BE) help narrow bond spread. Contrary to the theory of institutional economics wherein institution matters, I find that better provincial BE widens the EPU's impact on bond spread, which seems to be consistent with the theory of rational expectation. Finally, I discuss implications of the findings to both policy makers and market participants. |
Rights: | All rights reserved |
Access: | restricted access |
Files in This Item:
File | Description | Size | Format | |
---|---|---|---|---|
6601.pdf | For All Users (off-campus access for PolyU Staff & Students only) | 1.35 MB | Adobe PDF | View/Open |
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