Credit risk and bond pricing of local government in China |
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| Authors: | Yang Zhiling Ju Ronghua Xu Yunxiao |
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| Institution: | 1. China Agricultural University, Beijing, China;2. Peking University, Beijing, China |
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| Abstract: | The relationship between credit risk and the pricing of local government bonds in China is explored in this paper. The pricing of local government bonds was found to reflect credit risk, but the risk premium was small. The type of bond (‘directional’ or ‘non-directional’) significantly affected pricing. Repayment source had no effect. The authors make recommendations for the central government, local governments and investors. |
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| Keywords: | Credit risk government bonds local government in China marketization |
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