We provide the first empirical analysis on the effects of credit default swaps (CDS) on corporate distress resolution with a focus on debt recovery rate. CDS contracts are settled shortly after the occurrence of credit events such as restructuring or bankruptcy filings and, presumably, should...

Third-party loan guarantees are prevalent for the bank loans made in China. We study the economics of third-party loan guarantees using data from a large and legitimate loan guarantee firm. We show that guarantors provide useful information about the borrowers. We conclude that the loan...

Using manually collected data associated with bribery in China, we find that firms receive higher credit ratings when their travel and entertainment expenses are abnormally high. Higher credit ratings help firms to expand their debt capacity, which incentivizes issuers to bribe rating firms for...

We examine whether “rating shopping” or “rating catering” is a more accurate characterization of rating agency interactions regarding collateralized debt obligations (CDOs) prior to the credit crisis. Although investors paid a premium for dual-ratings, AAA CDO tranches rated by both...

Trillions of dollars of derivatives are trading in many markets regularly, but little is known about the direct interactions between different types of derivatives referencing the same firm. This study is the first to examine the impact of credit derivatives on equity derivatives. We show that...

Green bonds are bonds with a defined use of proceeds towards mitigating and adapting to climate change and solving environmental problems. While its market has expanded rapidly in recent years and attracted great investment attention, whether investors can identify greenwashing behaviors remains...