Finance Department's Lecture

Theme：Global Supply Chain and Cross-Border Financing

Speaker：Yu Zhang，Assistant Professor of Finance at Guanghua School of Management, Peking University

Coordinator：Qing Tong

Time：2019-03-06 10:00

Address：Room 1008, Mingde Business Building

Language：English

Abstract

Financial globalization is still far from complete four decades after the end of the Bretton Woods System largely due to transaction costs and informational frictions. In this study, we ask if global supply chain relationships help firms access cross-border financing in the international capital markets. Comparing two firms that are otherwise similar in covariates and in pre-formation outcome through a matching difference-in-differences strategy, we observe the firm that has formed global supply chain relation- ships to access more cross-border financing, after the global supply chain formation. This result is supported empirically by all major formal financing vehicles, including stock cross-listing, bond issuance, bank loans, and M&A deals, and is robust to controlling for strategic disclosure concerns. The estimated effect of global supply chain relationship formation on cross-border financing is stronger for firms in countries with stronger accounting and ethical standards and for small and growth firms, but weaker for firms in countries with tighter capital controls and more volatile exchange rates. This suggests global supply chain formation helps cross-border financing more through information production, not cashflow relocation or re-denomination.

Short biograph

Yu Zhang is an Assistant Professor of Finance at Guanghua School of Management, Peking University. His main research interests are macro-finance, housing, household finance and financial intermediation. He holds a PhD and a MA in Economics from Princeton University and a BA in Economics from Tsinghua University.