Information Content of the Geography of Underwriters on Bond Market
研究承销商与发债企业地理邻近性对债券融资成本和违约风险的影响，发现邻近承销商能降低融资成本和违约风险，但声誉和高透明度会削弱这一效应。
ABSTRACT We investigate the impact of underwriter geographic proximity on bond financing costs and default risk using Chinese corporate and enterprise bonds issued between 2009 and 2019. Our study reveals that bonds underwritten by geographically proximate underwriters incur lower financing costs and exhibit reduced default risk. However, this effect is attenuated when underwriters possess a strong reputation or when firms exhibit high transparency, suggesting a substitutive role of these factors in bond pricing. To address endogeneity concerns, we leverage the introduction of high‐speed rail (HSR) as an exogenous shock to perform differences‐in‐difference analysis, and employ instrumental variable and propensity score matching methods. We find that the establishment of HSR networks significantly weakens local underwriters' information advantages, reducing their unique ability to lower bond financing costs. Our results remain robust in various subsamples that exclude first‐tier cities and local government connections.