Exploring Determinants of Firms’ Participation in the New Offshore Renminbi Debt Securities Market

Mizen, P. and Tsoukas, S. (2015) Exploring Determinants of Firms’ Participation in the New Offshore Renminbi Debt Securities Market. Working Paper. Hong Kong Institute for Monetary Research.

113077.pdf - Accepted Version



Once in a while a major financial innovation creates a new product that changes the landscape for firms that adopt it. For example, junk bonds enabled leveraged buyouts, securitization stimulated off balance sheet growth in banks, and CDS offered pure trading in credit risk. New RMB financial products emerging as China opens its capital account provide a similar change to the landscape for firms and investors engaged with China or those using RMB as a vehicle currency. Uptake of the new products has been rapid, and in this paper we use the data from the Hong Kong Monetary Authority for offshore RMB bonds to explore that process. We are mostly interested in what determines firms’ participation decision in this market. We allow for changes in regulation, market depth, parallel market developments and changes in the advantages of participation using interest differentials to explain what influences firms’ and investors’ choices to enter the market and find that they all have an influence on the decision to participate in this new financial market.

Item Type:Research Reports or Papers (Working Paper)
Additional Information:HKIMR Working Paper No.23/2015
Glasgow Author(s) Enlighten ID:Tsoukas, Professor Serafeim
Authors: Mizen, P., and Tsoukas, S.
College/School:College of Social Sciences > Adam Smith Business School
Journal Name:Hong
Publisher:Hong Kong Institute for Monetary Research
Copyright Holders:Copyright © 2015 Hong Kong Institute for Monetary Research
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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