{"title":"Transmission effects of real estate risk on municipal bond spreads","authors":"Yan Ding, Changzheng Li, Sisi Ye","doi":"10.1016/j.frl.2025.107245","DOIUrl":null,"url":null,"abstract":"Using data from the Shanghai Stock Exchange, Shenzhen Stock Exchange, Interbank Dealers Association, and National Development and Reform Commission spanning 2014–2022 as well as the difference-in-difference technique, this study examines the transmission effect of real estate risk events on municipal bond spreads. Findings reveal that municipal investment bond spreads in risk-sensitive areas increase significantly after a real estate risk event. However, this impact is mitigated by strengthening the government's guarantee ability. Furthermore, this study highlights that real estate risk events have a greater impact on low-credit-rated municipal investment bonds than on high-credit-rated ones, with potential implications for financial market stability and government credit.","PeriodicalId":12167,"journal":{"name":"Finance Research Letters","volume":"3 1","pages":""},"PeriodicalIF":7.4000,"publicationDate":"2025-03-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Finance Research Letters","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1016/j.frl.2025.107245","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
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Abstract
Using data from the Shanghai Stock Exchange, Shenzhen Stock Exchange, Interbank Dealers Association, and National Development and Reform Commission spanning 2014–2022 as well as the difference-in-difference technique, this study examines the transmission effect of real estate risk events on municipal bond spreads. Findings reveal that municipal investment bond spreads in risk-sensitive areas increase significantly after a real estate risk event. However, this impact is mitigated by strengthening the government's guarantee ability. Furthermore, this study highlights that real estate risk events have a greater impact on low-credit-rated municipal investment bonds than on high-credit-rated ones, with potential implications for financial market stability and government credit.
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