Foreign Residency Rights and Corporate Bond Yield Spreads
研究中国上市公司实际控制人的境外居留权如何推高公司债券利差，发现其通过盈余管理和风险承担两条渠道起作用，且良好的内外部治理能缓解这一效应。
ABSTRACT We investigate the effect of ultimate controllers' foreign residency rights on corporate bond yield spreads. Using data on Chinese listed firms from 2010 to 2021, this study reveals a positive association between foreign residency rights and corporate bond yield spreads. The positive relationship is robust across different measures of foreign residency rights, estimation methods and after considering potential endogeneity issues. We propose two potential channels for the positive effect of foreign residency rights on corporate bond yield spreads: increasing firms' earnings management and taking more risk. Further, stronger external governance and internal governance alleviate the positive effects of foreign residency rights on corporate bond yield spreads. Additional analyses indicate that ultimate controllers with overseas residency rights are associated with more bond covenants, higher bank loan spreads and shorter loan maturity. Overall, our results indicate that corporate bondholders are fully aware of the expropriation risk created by controllers' foreign residency rights. Thus, investors and regulators in emerging markets should pay attention to controllers' foreign residency rights.