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How Firms Use Domestic and International Corporate Bond Markets

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  • Juan Carlos Gozzi
  • Ross Levine
  • Maria Soledad Martinez Peria
  • Sergio L. Schmukler

Abstract

This paper provides the first comprehensive documentation of the main features of corporate bond issues in domestic and international markets and analyzes how firms use these markets after they internationalize. We find that debt issues in domestic and international bond markets have different characteristics, not explained by differences across firms or their country of origin. International issues tend to be larger, of shorter maturity, denominated in foreign currency, and include a higher fraction of fixed rate contracts. Moreover, a large proportion of firms remain active in domestic bond markets after accessing international markets, and many of these firms use both markets for different types of issues. This evidence suggests that domestic and international bond markets provide different financial services and are not substitutes, but rather complements.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17763.

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Date of creation: Jan 2012
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Handle: RePEc:nbr:nberwo:17763

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Cited by:
  1. Patricio Valenzuela, 2013. "Rollover risk and corporate bond spreads," Documentos de Trabajo 300, Centro de Economía Aplicada, Universidad de Chile.
  2. Sergio Schmukler & Tatiana Didier, 2013. "The Financing and Growth of Firms in China and India: Evidence from Capital Markets," 2013 Meeting Papers 98, Society for Economic Dynamics.
  3. Borensztein, Eduardo & Cowan, Kevin & Valenzuela, Patricio, 2013. "Sovereign ceilings “lite”? The impact of sovereign ratings on corporate ratings," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4014-4024.
  4. Francisco Ceballos & Tatiana Didier & Sergio L. Schmukler, 2012. "Financial Globalization in Emerging Countries : Diversification vs. Offshoring," Labor Economics Working Papers 23350, East Asian Bureau of Economic Research.
  5. Luciana De Souza & João De Mendonça Mergulhã, 2014. "Dívidas Corporativas Brasieliras: Emitir No Mercado Interno Ou No Externo?," Anais do XLI Encontro Nacional de Economia [Proceedings of the 41th Brazilian Economics Meeting] 140, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  6. Narjess Boubakri & Sadok El Ghoul & Omrane Guedhami & Anis Samet, . "The Effects of Analyst Forecast Properties on the Cost of Debt: International Evidence," Finance Working Papers 15-12/2013, School of Business Administration, American University of Sharjah.
  7. Franklin ALLEN & Elena CARLETTI & Jun 'QJ' QIAN & Patricio VALENZUELA, 2012. "Financial Intermediation, Markets, and Alternative Financial Sectors," Economics Working Papers ECO2012/11, European University Institute.

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