How Firms Use Domestic and International Corporate Bond Markets
This paper provides the first comprehensive documentation of how firms use domestic and international corporate bond markets. Debt issues in domestic and international markets have different characteristics, not explained by differences across firm...
| Main Authors: | , , , |
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/09/16763181/firms-use-domestic-international-corporate-bond-markets http://hdl.handle.net/10986/12048 |
| Summary: | This paper provides the first
comprehensive documentation of how firms use domestic and
international corporate bond markets. Debt issues in
domestic and international markets have different
characteristics, not explained by differences across firms
or countries. International issues tend to be larger, of
shorter maturity, denominated in foreign currency, include
more fixed rate contracts, and entail lower yields. These
patterns remain when analyzing issues by firms from
countries with more developed domestic markets and higher
financial integration, and even when comparing issues
conducted by the same firm in different markets. These
findings are consistent with the views that (1) frictions
limit the ability of investors and firms to enter into
certain contracts in certain markets, (2) domestic and
international markets provide distinct financial services
and firms use them as complements, and (3) firms with access
to domestic and international markets enjoy advantages
relative to those that rely solely on domestic markets. |
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