From carry trades to trade credit: Financial intermediation by non-financial corporations

• 成果类型: Article
• 署名作者: Hardy, Bryan; Saffie, Felipe
• 署名单位: Bank for International Settlements (BIS); University of Virginia; National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2024.103988
• 发表日期: 2024
• 关键词: Emerging market corporate debt; Currency mismatch; Liability dollarization; Trade credit

摘要

We use detailed firm-level data from Mexico to document that non-financial corporations engage in carry trades by borrowing in foreign currency (FX) and lending in domestic currency, largely in the form of trade credit, accumulating currency risk in the process. Firms are more active in carry-trades when FX borrowing is relatively cheaper and build currency risk by accumulating peso assets. We use the 2009 Mexican peso depreciation to show that firms that were more active in carry trades experienced larger reductions in investment. Nevertheless, their extension of trade credit remained stable, insulating their trading partners from their balance sheet exposure to the shock.