Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128439
Authors: 
Zhitao, Lin
Wenjie, Zhan
Cheung, Yin-Wong
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 5736
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 proportional hazard model. The gravity effect captured by distances between China and its counterparts, if present, is mainly observed during the early part of the sample period under consideration.
Subjects: 
RMB swap lines
Heckman two-stage method
proportional hazard model
trade intensity
political factors and institutional characteristics
JEL: 
F30
F33
F36
Document Type: 
Working Paper

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