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Real and pseudo enter to the bond market in Russia. In search of the determinants

Author

Listed:
  • Teplova, Tamara

    (National Research University Higher School of Economics, Moscow, Russian Federation)

  • Galenskaya, Kristina

    (National Research University Higher School of Economics, Moscow, Russian Federation)

  • Teplov, Andrey

    (National Research University Higher School of Economics, Moscow, Russian Federation;)

Abstract

This paper presents the testing results for hypotheses which try to explain, how do Russian companies choose such financing sources, as public debt (bonds). Bivariate probit models have been applied on a sample of 1107 companies in the interval from 2015 to 2017. The main aim of this paper is to identify the presence of pseudo bond issues and to determine the factors of their issuance on the Russian market. The paradox of the Russian bond market is that with a decrease of profitability and with a deterioration in turnover, a higher the probability of entering the bond market can be observed. We explain this by the pseudo-placements hiding the schemes of bank lending because of the strict rules for regulating risky loans. Specific determinants of the Russian market are the ownership structure, the chief executive officer’s age (CEO), the number of board members. It has been found, that the selection of determinants for companies with a critical debt level is different from quality companies.

Suggested Citation

  • Teplova, Tamara & Galenskaya, Kristina & Teplov, Andrey, 2018. "Real and pseudo enter to the bond market in Russia. In search of the determinants," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 52, pages 22-45.
  • Handle: RePEc:ris:apltrx:0354
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    debt structure; public debt; bond market; bivariate probit models; ownership structure; CEO’ age; financial characteristics of firms;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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