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What Effect has Bond Market Development in Asia had on the Issue of Corporate Bonds

Author

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  • Paul Mizen
  • Serafeim Tsoukas

Abstract

This paper investigates the determinants of the firm's decision to issue corporate bonds in emerging Asian economies, using a novel database covering the period 1995 to 2004. We use comparable micro level panel data for 4 countries - Indonesia, Korea, Malaysia and Thailand - to explore the influence of firms' size and growth prospects, financial health and indicators of bond market development on the decision to issue corporate bonds. Our results show that the likelihood of bond issuance increases with size and growth prospects and with creditworthiness in all countries; there is evidence of firm level heterogeneity across firm size classes. Importantly, there is no effect from bond market development on the likelihood of bond issuance. We conclude that the benefits of bond market development are yet to spillover to corporate bond markets.

Suggested Citation

  • Paul Mizen & Serafeim Tsoukas, 2008. "What Effect has Bond Market Development in Asia had on the Issue of Corporate Bonds," Discussion Papers 08/02, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    • Handle: RePEc:not:notcfc:08/02
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    File URL: https://www.nottingham.ac.uk/cfcm/documents/papers/08-02.pdf
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    Citations

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    Cited by:

    1. Katheryn N. Russ & Diego Valderrama, 2009. "A Theory of Banks, Bonds, and the Distribution of Firm Size," NBER Working Papers 15454, National Bureau of Economic Research, Inc.
    2. Diego Valderrama & Katheryn N. Russ, "undated". "A Theory of Banks, Bonds, and the Distribution of Firm Size," Working Papers 915, University of California, Davis, Department of Economics.
    3. Russ, Katheryn N. & Valderrama, Diego, 2012. "A theory of bank versus bond finance and intra-industry reallocation," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 652-673.

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