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What is driving the corporate bond market development in Asia?

Author

Listed:
  • Oskar Kowalewksi

    (IESEG School of Management (LEM-CNRS-UMR 9221))

  • Pawel Pisany

    (Institute of Economics of the Polish Academy of Science, Collegium of World Economy, Warsaw School of Economics, Poland)

Abstract

We investigate the development of corporate bond markets in 10 Asian countries from 1995 to 2014. Using panel data on the market size and total issue of bonds by financial and non-financial companies, we confirm that macroeconomic and institutional factors are related to the depth of the market. In addition, we show that the issuance of bonds is also determined by other factors that strongly depend on the issuer type. We show that creditor rights and institutional quality are important in explaining the issuance of bonds by financial institutions. Furthermore, we determine a strong positive association between the level of domestic credit and the market and issue size of corporate bonds. In our opinion, the results indicate that there is a positive relationship between the development of the corporate bond market and the banking sector. These findings indicate that increased demand for bank loans induced the issuance of bonds by financial institutions which, in turn, may have led to the development of corporate bond markets in Asia.

Suggested Citation

  • Oskar Kowalewksi & Pawel Pisany, 2017. "What is driving the corporate bond market development in Asia?," Working Papers 2017-ACF-03, IESEG School of Management.
    • Handle: RePEc:ies:wpaper:f201703
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    More about this item

    Keywords

    corporate bond market; bond issuance; crisis; banking sector; Asia;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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