publication . Article . Research . 2016

China's Bilateral Currency Swap Lines

Wenjie Zhan; Yin-Wong Cheung; Zhitao Lin;
Open Access
  • Published: 01 Jan 2016 Journal: China & World Economy, volume 24, pages 19-42 (issn: 1671-2234, Copyright policy)
  • Publisher: Wiley
Abstract
We study the determinants of China’s bilateral local currency swap lines that were established since the recent global finance crisis. It is found that economic factors, political considerations, and institutional characteristics including trade intensity, economic size, strategic partnership, free trade agreement, corruption, and stability affect the decision of signing a swap line agreement. Once a swap line agreement decision is made, the size of the swap line is then mainly affected by trade intensity, economic size, and the presence of a free trade agreement. The results are quite robust with respect to the choices of the Heckman two-stage framework or the ...
Subjects
free text keywords: General Economics, Econometrics and Finance, F30, F33, F36, RMB swap lines, Heckman two-stage method, proportional hazard model, trade intensity, political factors and institutional characteristics, Local currency, Strategic partnership, Swap (finance), Monetary economics, Currency swap, Economics, Corruption, media_common.quotation_subject, media_common, China, Volatility swap, Gravity effect, Macroeconomics, ddc:330
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