How does the theory of comparative advantage associate to the currency swap market?
Name recognition is very important in the international bond market. Without it, even a creditworthy corporation will determine itself paying higher interest rate for foreign denominated funds than local borrower of equivalent creditworthiness. Therefore, two firms of equivalent creditworthiness can each exploit their, respective, name identification by borrowing in their local capital market at a favourable rate & then re-lending at the similar rate to the other.