This paper investigates whether increased female representation on corporate boards affects firms’ bond financing costs. Exploiting the 2017 Big Three’s campaigns as a plausibly exogenous shock, we document that firms experiencing larger increases in female board representation, induced by the campaigns, experience significant reductions in bond yield spreads and improvements in credit ratings. We identify reduced leverage and enhanced workplace environment as key mechanisms, and show that the effects are stronger among firms with greater tail risk and information asymmetry. An alternative identification strategy based on California’s SB 826 regulatory mandate yields consistent results. Our findings suggest that board gender diversity enhances governance in ways valued by credit markets.

We investigate the impact of government environmental credit ratings on bond credit spreads based on a sample of Chinese A-share listed companies from 2014 to 2022. Empirical results demonstrate that a favourable environmental credit rating significantly reduces bond credit spreads, highlighting the incentivising effect of environmental credit ratings. Mechanism testing reveals that a good environmental credit rating diminishes information asymmetry and enhances an enterprise’s resource acquisition capabilities, reducing bond credit spreads. Furthermore, subgroup analyses suggest the reduction effect is more pronounced in enterprises with low debt and tax credit ratings.

We investigate the impact of government environmental credit ratings on bond credit spreads based on a sample of Chinese A-share listed companies from 2014 to 2022. Empirical results demonstrate that a favourable environmental credit rating significantly reduces bond credit spreads, highlighting the incentivising effect of environmental credit ratings. Mechanism testing reveals that a good environmental credit rating diminishes information asymmetry and enhances an enterprise’s resource acquisition capabilities, reducing bond credit spreads. Furthermore, subgroup analyses suggest the reduction effect is more pronounced in enterprises with low debt and tax credit ratings.

There is increasing attention on information transfers along supply chain partners for firm (extreme) events. This growing literature finds spillover effects following certain types of firm events. Using data from credit rating actions of Chineselisted firms over the period between March 2007 and May 2020, we examine the spillover effects of supply chains by focusing on the market reactions of event firms to the action announcements. We find strong evidence of spillover effects driven by the market reactions of event firms, which are enhanced through information diffusion channels as supply chain partners receive more investor attention. Moreover, the effects are stronger when event firms’ market reactions are negative, event firms are nonstated-owned, the industry concentration of event firms is higher, or the suppliercustomer business relationship is closer. Overall, these findings highlight the role of investor attention in addition to network characteristics in supply chain spillovers.

This paper creates default-probability-(PD)-implied credit ratings for Chinese firms following the S&P global rating standard. The domestic credit rating agency (DCRA) ratings are higher than the PD-implied ratings by ten notches on average for the identical level of default risk, implying that the domestic ratings are significantly inflated. The PD-implied ratings outperform the DCRA ratings in detecting defaults and complement the latter in predicting yield spreads. The PD-implied ratings draw information from operating efficiency-related variables; in contrast, the DCRA ratings pay attention to scale-based firm characteristics in credit risk assessment.

Using a difference-in-differences (DID) approach, this research assesses the effect of a firm’s credit rating issued by domestic rating agencies on stock price crash risk (SPCR). The results show that SPCR for treated firms decreases by 11% after firm ratings, suggesting that they can aggravate information content at the firm level. The effect is consistently more evident when stock price synchronization is higher and is stronger in firms with low media coverage, in firms with low audit quality, in state-controlled firms, and in firms with low investor protection. In addition, during a bear market year, the quality of firm ratings is higher. Overall, our findings support that investors could gain more information via firm ratings issued by credit rating agencies. Through our research, policymakers and investors can pay more attention to firm ratings that help play the information intermediary role of credit rating agencies.

The goal of this paper is to discuss how we establish the “Hammer (CAFÉ) Credit System” by applying Gibbs sampling algorithm under the framework of bigdata approach to extract features in depicting bad or illegal behaviors by following the “five step principle” applying international credit rating standards. In particular, we will show that our Hammer (CAFÉ) Credit System is able to resolve three problems of the current credit rating market in China which rate: “1) the rating is falsely high; 2) the differentiation of credit rating grades is insufficient; and 3) the poor performance of predicting early warning and related issues”. In addition the Hammer (CAFÉ) credit is supported by clearly defining the "BBB" as the basic investment level with annualized rate of default probability in accordance with international standards in the practice of financial industries, and the credit transition matrix for “AAA-A” to “CCC-C” credit grades.

Using political turnovers in mayoral appointments at the prefecture-city level in China, we show that investors in the municipal corporate bond market price their concerns for rising local political uncertainty into bonds and relocate capital toward other corporate bonds issued by local firms. Municipal/non-municipal corporate bond issue spreads increase (decrease) by 8.9 (14) basis points before the expected political turnover of mayors and reverse afterwards. The effect is more prominent for bonds issued in cities with investors who have a strong local preference, suggesting investors switch from MCBs to local non-MCBs in their bond holdings. The pricing effect is also stronger for bonds issued in regions with more developed financial markets and bonds with lower credit ratings. Lastly, bond market participants only price in the political risk induced by the turnovers of politician with direct involvement in local economic activities.

We investigate the impact of the geographic proximity of underwriters on bond characteristics by using corporate and enterprise bonds issued in China from 2009 to 2019. We find bonds underwritten by underwriters in close geographic proximity are associated with lower financing costs, longer maturity in high and medium credit rating firms, shorter maturity in low credit rating firms, and lower default risk. Further, we find substitution effects between the geographic proximity of underwriter and underwriter reputation, and also between the geographic proximity of underwriter and firm transparency on reducing the costs of bond financing; i.e., a better reputation of the underwriter or higher transparency of the firm will weaken geographical proximate underwriters’ effects. Our results are robust in subsamples when firms have different degrees of local government connections.

This paper studies the information interpretation of return synchronicity in the context of corporate bond market and examines the specific event intensity rationale that underlie the relationship between bond synchronicity and bond level information environment. We find that investment-grade bonds, bonds without rating splits, and bonds issued by public firms present higher levels of bond return synchronicity. These results hold after we control for bond level characteristics, industry and year fixed effects. By using credit rating change announcements as a unique measure of bond specific event intensity, we corroborate that security under better information environment has lower likelihood of specific event surprise occurrence, and thus is more synchronous with the market. We also verify that once rating change announcements did take place, the corresponding return synchronicity would be lower. Such impact would be more pronounced when the rating is downgraded compared with upgrade rating changes.