International Trade and the Currency Composition of Corporate Debt

Date: 2021-07-06 14:16:28
Time: 14:00​-16:00
Venue: Zijingang Campus
Speaker: JIAO Yang
Category: Talk & Lecture

Speaker: JIAO Yang, Assistant Professor, Fudan University

Venue: Room 530, Building of Economics, Zijingang Campus


This paper presents causal evidence that international trade affects the currency composition of corporate debt. We address endogeneity concerns by using South Korea’s and its trading partners’ demand shocks. Cross-sectional patterns, long difference and IV regression results all confirm our theoretical prediction that firms respond to higher export shares by borrowing larger shares of debts in foreign currency. We further show that higher shares of imported intermediate input shares lower their foreign currency debt shares. These findings provide novel insights on exchange rate policy discussions when corporate foreign currency debts are pervasive.