Go Big or Go Home? The “Price Tag” of Corporate Strategic Aggressiveness and Bond Issuance Spreads

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Authors: Xue Li, Ruibing Zhou, Jenny Jing Wang, Yuan Sun
Cited by: 0
References: 51

Abstract

ABSTRACT This study examines whether—and through which mechanisms—corporate strategic aggressiveness affects bond spreads, using primary‐and secondary‐market data on bonds issued by Chinese A‐share–listed firms from 2004 to 2023. We find that greater strategic aggressiveness is associated with significantly wider bond issuance spreads. The association is stronger for state‐owned enterprises, non‐guaranteed issuers, labor‐intensive firms, firms in high‐tech, heavy‐polluting, and non‐digital sectors, and firms operating in less‐competitive industries. Mechanism tests indicate that heightened aggressiveness widens spreads primarily by increasing default risk. Corporate governance and information‐disclosure quality also serve as important transmission channels linking aggressiveness to spreads. Supplementary evidence shows that the effect on primary‐market issuance spreads propagates to secondary‐market credit spreads.

Fields of Study & Subjects

Credit Risk and Financial Regulations Corporate Finance and Governance Financial Distress and Bankruptcy Prediction

Publication details

Journal / source
Accounting and Finance
Volume
66
Issue
3
Pages
2502–2521
Publication date
29 January 2026
Language
EN