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Internet Bondholder Relations: Explaining Differences in Transparency Among German Issuers of Corporate Bonds

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  • Heinrich Degenhart

    (Leuphana Universität Lüneburg, Institut für Bank-, Finanz- und Rechnungswesen, Professur für Finanzierung und Finanzwirtschaft, Scharnhorststraße 1, D-21335 Lüneburg)

  • Steve Janner

    (Leuphana Universität Lüneburg, Institut für Bank-, Finanz- und Rechnungswesen, Professur für Finanzierung und Finanzwirtschaft, Scharnhorststraße 1, D-21335 Lüneburg)

Abstract

Bondholder relations gains importance for German non-financial firms as the debt market environment is changing significantly. Beyond an unprecedented increase in the amount of outstanding securities, there are two other effects that we observe in the German market for corporate bonds: an increasing focus on retail investors and a growing number of small to medium-sized firms entering the market. Both developments underline the need to explore bondholder relations, its implementation and effectiveness. In the course of this study, we intend to promote the understanding of why some firms disclose more to their bondholders than others. Following the information, agency, and related frameworks, we assume that Internet financial reporting helps reduce information asymmetries between bond issuers and dispersed investors. We devote this study to identifying main factors that determine cross-sectional heterogeneity. Conducting a multivariate analysis, we test hypotheses on the influence of capital market orientation, investors’ informational needs, firm complexity, default risk, and family ownership. We find that all constructs, except for the default risk, are at least partly relevant in explaining the extent of information that bond issuers disclose on their websites.

Suggested Citation

  • Heinrich Degenhart & Steve Janner, 2012. "Internet Bondholder Relations: Explaining Differences in Transparency Among German Issuers of Corporate Bonds," Credit and Capital Markets, Credit and Capital Markets, vol. 45(3), pages 313-341.
  • Handle: RePEc:kuk:journl:v:45:y:2012:i:3:p:313-341
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    Keywords

    Investor Relations; Bondholder Relations; Disclosure; Bond Market; Germany;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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