Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
An unintended consequence of loose US monetary policy is the increase in currency risk exposure abroad. Using firm-level data on corporate bond issuances in 16 emerging market economies (EMEs) between 2003 and 2017, we find that EME companies are more likely to issue bonds in foreign currency when US interest rates are low. This effect is driven by non-exporters. Interestingly, capital controls on bond inflows significantly decrease the likelihood of issuing in foreign currency and can even eliminate the adverse impact of low US interest rates. In contrast, macroprudential foreign exchange regulations increase foreign currency issuances among nonfinancial companies.