Stock market reaction to debt financing arrangements in Russia
AbstractThis paper investigates stock market reaction to debt arrangements in Russia. The analysis of the valuation of debt arrangements by stock markets provides information about the use of debt by Russian companies. We apply the event study methodology to check whether debt announcements lead to abnormal returns using a sample of Russian listed companies that issued syndicated loans or bonds between June 2004 and December 2008. We find a negative reaction of stock markets to debt arrangements that can be explained by moral hazard behavior of shareholders at the expense of debtholders. Further, we observe no significant difference between announcements of syndicated loans and bonds. Thus, our findings support the view that Russian companies could have incentives to limit their reliance on external debt.
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Bibliographic InfoPaper provided by Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg (France) in its series Working Papers of LaRGE Research Center with number 2010-10.
Date of creation: 2010
Date of revision:
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Corporate bonds; event study; Russia; stock returns; syndicated loans.;
Other versions of this item:
- Christophe Godlewski & Zuzana Fung�čov� & Laurent Weill, 2011. "Stock Market Reaction to Debt Financing Arrangements in Russia," Comparative Economic Studies, Palgrave Macmillan, vol. 53(4), pages 679-693, December.
- Godlewski, Christophe J. & Fungacova, Zuzana & Weill, Laurent, 2010. "Stock market reaction to debt financing arrangements in Russia," BOFIT Discussion Papers 16/2010, Bank of Finland, Institute for Economies in Transition.
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-18 (All new papers)
- NEP-BAN-2010-09-18 (Banking)
- NEP-CIS-2010-09-18 (Confederation of Independent States)
- NEP-CWA-2010-09-18 (Central & Western Asia)
- NEP-FMK-2010-09-18 (Financial Markets)
- NEP-TRA-2010-09-18 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Zuzana Fungacova & Christophe J. Godlewski & Laurent Weill, 2009.
"Asymmetric Information and Loan Spreads in Russia: Evidence from Syndicated Loans,"
Working Papers of LaRGE Research Center
2009-01, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg (France).
- Fungacova, Zuzana & Godlewski, Christophe J. & Weill, Laurent, 2009. "Asymmetric Information and Loan Spreads in Russia: Evidence from Syndicated Loans," BOFIT Discussion Papers 7/2009, Bank of Finland, Institute for Economies in Transition.
- Christophe Godlewski, 2012. "Are bank loans still “special” (especially during a crisis)? Empirical evidence from a European country," Working Papers of LaRGE Research Center 2012-03, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg (France).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christophe J. Godlewski).
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