Foreign bond investors and market discipline

Charlotte Rommerskirchen

doi:10.1177/1024529419872171

Foreign bond investors and market discipline

Charlotte Rommerskirchen

School of Social and Political Science

Research output: Contribution to journal › Article › peer-review

Abstract

This article scrutinizes the impact of foreign bond ownership on market discipline, that is the mutual responsiveness of financial markets and sovereign borrowers. The empirical investigation covers 12 advanced economies during the Great Moderation (1981-2008). This article finds no evidence that foreign bond investors affect the sensitivity of bond spreads to fiscal policy. Reversely, results show that government responsiveness to market pressure is contingent on the make-up of its investor base. Bond spreads spur on fiscal consolidation. The larger the share of foreign bond investors the bigger this effect.

Original language	English
Pages (from-to)	3-25
Journal	Competition & Change
Volume	24
Issue number	1
Early online date	5 Sept 2019
DOIs	https://doi.org/10.1177/1024529419872171
Publication status	Published - 1 Jan 2020

Keywords / Materials (for Non-textual outputs)

bond markets
debt management
fiscal consolidation
government debt
market discipline

Access to Document

10.1177/1024529419872171

Rommerskirchen_CC_2019_ForeignBondInvestorsMarketDiscipline
The final version of this paper has been published in Competition & Change, Vol/Issue, by SAGE Publications Ltd, All rights reserved. © Charlotte Rommerskirchen, 2019. It is available at: https://doi.org/10.1177/1024529419872171
Accepted author manuscript, 648 KB
Rommerskirchen_CC_2019_Table1_ForeignBondInvestorsMarketDisciplineAccepted author manuscript, 356 KB
Rommerskirchen_CC_2019_Table2_ForeignBondInvestorsMarketDisciplineAccepted author manuscript, 430 KB
Rommerskirchen_CC_2019_Fig1_ForeignBondInvestorsMarketDisciplineAccepted author manuscript, 1.05 MB
Rommerskirchen_CC_2019_Fig2_ForeignBondInvestorsMarketDisciplineAccepted author manuscript, 1.05 MB

EVALUATION PRACTICES IN FINANCIAL MARKETS
MacKenzie, D. (Principal Investigator) & Hardie, I. (Co-investigator)
EU government bodies
1/09/12 → 31/08/18
Project: Research

Charlotte Rommerskirchen
- School of Social and Political Science - Senior Lecturer - International Political Economy
Person: Academic: Research Active

Cite this

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Foreign bond investors and market discipline

Abstract

Keywords / Materials (for Non-textual outputs)

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EVALUATION PRACTICES IN FINANCIAL MARKETS

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Charlotte Rommerskirchen

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