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SUMMARY:Understanding the Risk of China’s Local Government Debts and Its
  Linkage with Property Markets - Dr Brent Ambrose\, Penn State University
DTSTART:20151014T150000Z
DTEND:20151014T160000Z
UID:TALK61152@talks.cam.ac.uk
CONTACT:Clare Eaves
DESCRIPTION:The intertwining of local Chinese housing markets with governm
 ent fiscal policies coincides with the significant economic growth in Chin
 a over the past 25 years.  This connection  is the direct result of China
 ’s central government reforms to its fiscal system that have encouraged 
 local governments to rely on land sales and development to fund required i
 nfrastructure projects.  Since China does not allow local governments to d
 irectly participate in the municipal bond market\, these governments rely 
 on a unique funding mechanism known as Local Government-Backed Investment 
 Units (LGBIU). We study the linkage between the solvency of local governme
 nt debt and local housing market risk. Our results indicate that areas wit
 h higher expected house price growth issue debt with lower risk premiums. 
  Furthermore\, bonds issued by LGBIUs from areas that experience greater c
 hanges in housing prices have a corresponding decline in observed yield sp
 reads. Thus\, the results suggest that investors do price local housing ri
 sk into Chinese municipal bond risk premiums.\n\n\n\n\n\nSpeaker biography
 :\n\nBrent W. Ambrose is the Smeal Professor of Real Estate\, Director of 
 the Institute for Real Estate Studies\, and Director of the Smeal College 
 Ph.D. Program at the Smeal College of Business at the Pennsylvania State U
 niversity.  Prior to joining Penn State University\, Dr. Ambrose was the D
 irector of the Center for Real Estate Studies and Professor of Finance at 
 the University of Kentucky where he held the Kentucky Real Estate Professo
 rship.  In 2010\, Dr. Ambrose was President of the American Real Estate an
 d Urban Economics Association (AREUEA) and served as the Executive Vice Pr
 esident of AREUEA from 1996 to 2003. Currently\, Dr. Ambrose is the co-edi
 tor of Real Estate Economics (the journal of the American Real Estate and 
 Urban Economics Association) and serves on the editorial boards of the Jou
 rnal of Real Estate Finance and Economics\, the Journal of Real Estate Res
 earch\, and the International Real Estate Review\, and is a member of the 
 board of directors for the Real Estate Research Institute and the American
  Real Estate and Urban Economics Association. Dr. Ambrose specializes in r
 eal estate finance\, corporate finance\, and fixed income security analysi
 s.  His research interests include issues related to Real Estate Investmen
 t Trusts (REITs)\, loss mitigation programs associated with mortgage defau
 lt and foreclosure\, Government Sponsored Enterprises (GSEs)\, fixed-incom
 e securities\, and consumer credit contracts.  Dr. Ambrose holds a Ph.D. a
 nd M.B.A. from the University of Georgia and a B.S. in Business from Wake 
 Forest University.
LOCATION:Mill Lane Lecture Room 1
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