Winners and losers from sovereign debt inflows

We study the effects of sovereign debt inflows on domestic firms. To do so, we exploit episodes large inflows, which follow announcements inclusion six emerging countries into major indexes. find that these events reduce government bond yields, appreciate currency, and have heterogeneous stock-market Firms operating in tradable industries experience lower returns than firms non-tradable industries. In addition, financial firms, government-related rely more external financing higher returns. The effect is stronger display larger reductions yields. appreciations. provide a stylized model rationalizes results. Our findings shed novel light channels through affect countries.