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Exploration of credit spreads and information disclosure quality of corporate bonds under economic policy uncertainty

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  • Lu, Xiao
  • Zhou, Ze-Jia
  • Feng, Chenchen

Abstract

This paper focuses on public corporate bonds issued in the exchange market between 2016 and 2023, examining the link between information disclosure quality and bond credit spreads. Our findings reveal that higher disclosure quality notably narrows credit spreads. Moreover, increased economic policy uncertainty amplifies the negative impact of disclosure quality on spreads. Improved disclosure quality also mitigates financing constraints, further reducing credit spreads. Notably, private enterprises see a stronger influence of disclosure quality on their bond credit spreads compared to state-owned enterprises. As China's bond market expands, enhancing listed firms' disclosure quality is crucial for investors to access vital information and protect their interests. It also addresses the need to improve financing conditions for listed firms and bolster bond financing.

Suggested Citation

  • Lu, Xiao & Zhou, Ze-Jia & Feng, Chenchen, 2025. "Exploration of credit spreads and information disclosure quality of corporate bonds under economic policy uncertainty," Finance Research Letters, Elsevier, vol. 82(C).
    • Handle: RePEc:eee:finlet:v:82:y:2025:i:c:s1544612325007901
    DOI: 10.1016/j.frl.2025.107531
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    1. Zhang, Xueying & Bian, Haodong & Walker, Thomas & Barabanov, Sergey, 2025. "The impact of financial report comment letters on bond pricing: Evidence from China," Finance Research Letters, Elsevier, vol. 85(PC).

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