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Corporate Debt Maturity in Developing Countries: Sources of Long- and Short-Termism

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Listed:
  • Juan J. Cortina

    () (World Bank)

  • Tatiana Didier

    () (World Bank)

  • Sergio L. Schmukler

    () (World Bank)

Abstract

This paper documents to what extent firms from developing countries borrow short versus long term, using data on corporate bond and syndicated loan markets. Contrary to claims in the literature based on firm balance sheets, firms from developing countries borrow through bonds and syndicated loans at maturities similar to those obtained by developed country firms. The composition and use of financing matters. Firms from developing countries borrow shorter term in domestic bond markets, but the differences in international issuances (accounting for most of the proceeds) are significantly smaller. Developing country firms borrow longer term in syndicated loan markets, which they partially use for infrastructure projects. However, only large firms from developing countries (similar in size to those from developed ones) issue bonds and syndicated loans. The short-termism in developing countries is partly explained by a lower proportion of firms using these markets, with more firms relying on other shorter-term instruments.

Suggested Citation

  • Juan J. Cortina & Tatiana Didier & Sergio L. Schmukler, 2017. "Corporate Debt Maturity in Developing Countries: Sources of Long- and Short-Termism," Mo.Fi.R. Working Papers 142, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  • Handle: RePEc:anc:wmofir:142
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    References listed on IDEAS

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    More about this item

    Keywords

    capital raising; corporate bonds; domestic and international debt markets; developing countries; firm financing; issuance maturity; long-term debt; short-term debt; syndicated loans;

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G0 - Financial Economics - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • 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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