Abstract Using offshore affiliates as financing vehicles by emerging market corporates (“offshore issuance”) has become widespread post-crisis. In this study, we investigate the extent to which offshore bond issuance has… Click to show full abstract
Abstract Using offshore affiliates as financing vehicles by emerging market corporates (“offshore issuance”) has become widespread post-crisis. In this study, we investigate the extent to which offshore bond issuance has become a transmission channel of global financial conditions to emerging market economies. Using panel vector auto-regression methods, we find that offshore bond issuance has become more important than onshore bond issuance as a transmission channel of global liquidity after 2010. We also find that offshore bond issuance plays a significant role in countries with strengthened capital account restrictions, but not in countries with weakened capital account restrictions.
Journal Title: Journal of International Money and Finance
Year Published: 2021
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