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The Rise of Domestic Capital Markets for Corporate Financing: Lessons from East Asia

Author

Listed:
  • Facundo Abraham

    () (World Bank Development Research Group)

  • Juan J. Cortina

    () (World Bank Development Research Group)

  • Sergio L. Schmukler

    () (World Bank Development Research Group)

Abstract

During the past decades, firms from emerging economies have significantly increased the amount of financing obtained in capital markets. Most of the literature has focused on issuances in international markets, which appear to have been a key driver of the overall activity in a context of financial globalization. This paper explores whether domestic issuances have also played a role in this increase in financing. By examining the case of East Asia, which captures most of the capital raisings among emerging economies, this paper shows that domestic issuances have been the main component of the overall expansion in capital market financing since 2000. As domestic markets developed, more and smaller firms accessed capital markets, while larger corporations increased their funding sources and their resilience to international shocks. The experience of East Asia shows that domestic capital markets can play a useful role and that numerous policies might aid in their development.

Suggested Citation

  • Facundo Abraham & Juan J. Cortina & Sergio L. Schmukler, 2019. "The Rise of Domestic Capital Markets for Corporate Financing: Lessons from East Asia," Mo.Fi.R. Working Papers 154, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  • Handle: RePEc:anc:wmofir:154
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Asian Financial Crisis; corporate bond markets; corporate financing; Global Financial Crisis; SME capital markets; stock markets; syndicated loan markets;

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • G00 - Financial Economics - - General - - - General
    • G01 - Financial Economics - - General - - - Financial Crises
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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