We study the mandated introduction of an auction (and its subsequent supervision) for the pri-mary bond market in China. These regulatory interventions significantly reduce the cost of debt for Chinese issuers. While this reduction is partly driven by reduced information asymmetry, we show the...

We study the mandated introduction of a supervised auction for the primary bond market in China. The regulatory intervention significantly reduced the cost of debt for Chinese issuers. We show that the majority of the benefits flow from reduced agency conflict between underwriters and issuers....