Abstract
AbstractThis study explores the relationship between domestic creditor protection and foreign investment decisions in bond markets. It also investigates how the difference between domestic and foreign creditor protections affects the foreign investment. The impact of domestic creditor protection on cross‐border investment in bonds is twofold. A high level of domestic creditor protection increases international diversification. At the same time, an efficient protection of creditor rights at home reduces the sensitivity of foreign investment to foreign creditor protection. These results hold most strongly for investing countries with high levels of domestic creditor protection. In addition, this study shows that the difference between domestic and foreign creditor protections matters for investment decisions: if domestic creditor protection is more efficient than foreign creditor protection, the sensitivity of foreign investment to foreign (domestic) creditor protection decreases (increases). Copyright © 2016 John Wiley & Sons, Ltd.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.