The new normal: how does corporate bond trading impact on corporate policy?
Corporate bond trading and its implications for corporate policies
As the world transitions to a 'new normal' after the global financial crisis (GFC), researchers at the Faculty of Business and Economics are investigating corporate bond trading and its implication for corporate policies.
Funded by a faculty research grant, the Department of Finance's Dr Zhou Zhong, together with Dr Hae Won Jung, are comparing the bond market liquidity and bond investors’ trading costs before and after the GFC, as well as the regulatory changes in response to the crisis.
They will also studying how institutional investors’ dual holdings - meaning the simultaneous holding of both significant equity positions and debt claims of the same firm - influences the way in which firms use executive compensation incentives.
Studies in this field have tended to focus on the impact of the stock market.
However, the corporate bond market is equally as important to the financial system, and has continued to change since the financial crisis.
This project will bridge gaps in existing literature, as well as provide important implications for corporate policies.