Bonds or Loans? The Effect of Macroeconomic Fundamentals
Abstract
The costs of debt crises are not invariant to the foreign debt instrument composition: bank loans or bonds. The lending boom of the 1990s witnessed considerable variation over time and across countries in the debt instrument used by emerging market (EM) borrowers. This paper tests how macroeconomic fundamentals affect the composition of international debt instruments used by EM borrowers. Analysis of micro-level data using ordered probability model shows that macroeconomic fundamentals explain a significant share of variation in the ratio of bonds to loans for private borrowers, but not for the sovereigns.Download Info
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Paper provided by Yale School of Management in its series Yale School of Management Working Papers with number ysm343.Length:
Date of creation: 01 Apr 2003
Date of revision: 01 Apr 2007
Handle: RePEc:ysm:somwrk:ysm343
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Web page: http://icf.som.yale.edu/
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Related research
Keywords: Emerging Markets; Foreign Debt; Debt Composition; Country Risk;Other versions of this item:
- Galina Hale, 2007. "Bonds or Loans? the Effect of Macroeconomic Fundamentals," Economic Journal, Royal Economic Society, vol. 117(516), pages 196-215, 01.
- Galina Hale, 2003. "Bonds or Loans? The Effect of Macroeconomic Fundamentals," Cowles Foundation Discussion Papers 1403, Cowles Foundation for Research in Economics, Yale University, revised Sep 2005.
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-07-18 (All new papers)
References
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Barry Eichengreen & Pipat Luengnaruemitchai, 2006.
"Why doesn’t Asia have bigger bond markets?,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Asian bond markets: issues and prospects, volume 30, pages 40-77
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"Why Larger Lenders Obtain Higher Returns: Evidence from Sovereign Syndicated Loans,"
Financial Management,
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"International Financial Integration through Equity Markets: Which Firms from Which Countries Go Global?,"
CEPR Discussion Papers
6137, C.E.P.R. Discussion Papers.
- Claessens, Stijn & Schmukler, Sergio L., 2007. "International financial integration through equity markets: Which firms from which countries go global?," Journal of International Money and Finance, Elsevier, vol. 26(5), pages 788-813, September.
- Claessens, Stijn & Schmukler, Sergio L., 2007. "International financial integration through equity markets : which firms from which countries go global ?," Policy Research Working Paper Series 4146, The World Bank.
- Sergio L. Schmukler & Stijn Claessens, 2007. "International Financial Integration Through Equity Markets: Which Firms from Which Countries Go Global?," IMF Working Papers 07/138, International Monetary Fund.
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International Finance Discussion Papers
878, Board of Governors of the Federal Reserve System (U.S.).
- Arteta, Carlos & Hale, Galina, 2008. "Sovereign debt crises and credit to the private sector," Journal of International Economics, Elsevier, vol. 74(1), pages 53-69, January.
- Carlos Arteta & Galina Hale, 2006. "Sovereign debt crises and credit to the private sector," Working Paper Series 2006-21, Federal Reserve Bank of San Francisco.
- Galina Hale & Carlos Arteta, 2007.
"Currency crises and foreign credit in emerging markets: credit crunch or demand effect?,"
Working Paper Series
2007-02, Federal Reserve Bank of San Francisco.
- Hale, Galina & Arteta, Carlos, 2009. "Currency crises and foreign credit in emerging markets: Credit crunch or demand effect?," European Economic Review, Elsevier, vol. 53(7), pages 758-774, October.
- Barry Eichengreen & Pipat Luengnaruemitchai, 2004. "Why Dones't Asia have the biger bond markets," Working Papers 242004, Hong Kong Institute for Monetary Research.
- Xingwang Qian & Andreas Steiner, 2012. "International Reserves and the Composition of Equity Capital Inflows," Working Papers 90, Institute of Empirical Economic Research.
- Paul Mizen & Serafeim Tsoukas, 2008.
"Evidence on the External Finance Premium from the US and Emerging Asian Corporate Bond Markets,"
Working Papers
142008, Hong Kong Institute for Monetary Research.
- Paul Mizen & Serafeim Tsoukas, . "Evidence on the external finance premium from the US and emerging Asian corporate bond markets," Discussion Papers 06/04, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
- Winfried Koeniger & Matthieu Bussiere & Marcel Fratzscher, 2004. "Currency Mismatch, Uncertainty and Debt Structure," Econometric Society 2004 North American Summer Meetings 181, Econometric Society.
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- Paul Mizen & Serafeim Tsoukas, 2010. "What Effect Has Bond Market Development in Emerging Asia Had on the Issuance of Corporate Bonds?," Working Papers 182010, Hong Kong Institute for Monetary Research.
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