【主讲】李丹 副教授 (复旦大学经济学院)
【主题】Reputation Building of a Nascent Government in Debt Financing：Lessons from the Bond Market in China, 1912-1937
【时间】2017年5月25日 (周四) 15：30-17：00
【地点】上海财经大学经济学院楼402室
【语言】英文
【摘要】This paper documents the development of the government bond market in Pre-War China (1912-1937). Interestingly, the secondary market for government bonds thrived in terms of its size and liquidity during the early Nationalist Era (1927-31) and declined later. Why did investors finance a nascent military government plagued by warfare? We find that the Nationalist government settled its predecessors’ debts and consistently serviced its debts even it was still in a war to unify China. By doing so, the government successfully distinguished itself from its predecessors, which were serial defaulters, at the first place. Accordingly, the government was able to float more bonds on the secondary market. When the government partially defaulted on its debts later, investors declined its access to the market. Moreover, we construct various quantitative measures for the level of various governments’ reputation throughout our study period. And our empirical analyses show that the government reputation is crucial in affecting the likelihood to float a bond on the secondary market and in determining the prices of the outstanding bonds traded in the market. We suggest that our results are consistent with the implications from the reputational theory on sovereign debts, and show other competing explanations do not fit the observed empirical pattern. Our study sheds light on the puzzling facts that why some nascent governments with undemocratic political institution and weak investor protection can still borrow from the public.
