Bank Credit and Market-based Finance for Corporations: The Effects of Minibond Issuances

Ongena, Steven; Pinoli, Sara; Rossi, Paola; Scopelliti, Alessandro

doi:10.2139/ssrn.3727197

Cited by 7 publications

(6 citation statements)

References 58 publications

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“…Becker and Josephson [2016] is an important exception, although their data stops in 2010 and includes only public firms, many outside the Euro Area. We also share some facts with the independent works of Ongena et al [2020] and who study the introduction of minibonds in Italy in 2012. The two approaches are complementary: our broad sample increases external validity, while detailed data from the Italian central bank helps to narrow down the mechanisms at play.…”

Section: Related Worksupporting

confidence: 73%

The Rise of Bond Financing in Europe

Darmouni

Papoutsi

2022

SSRN Journal

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Section: Related Worksupporting

confidence: 73%

The Rise of Bond Financing in Europe

Darmouni

Papoutsi

2022

SSRN Journal

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“…In addition, Abraham, et al [22] explained that the development of the domestic financial market encourages access to capital for companies by issuing shares or bonds and a form of diversification of corporate capital sources. In terms of liquidity risk, equity-based financing positively correlates with the required stable funding and increases the company's bargaining power [23]. Furthermore, Ahmed and Wahid [24] examined the financial structure and growth relationship by employing a panel cointegration model in African countries.…”

Section: Literature Reviewmentioning

confidence: 99%

Achieving Sustainable Economic Growth: Analysis of Islamic Debt and the Islamic Equity Market

et al. 2021

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The financial sector is divided into two broad categories: equity and banking markets. The healthy functioning of these sectors plays an imperative role in any economy. This study aimed to examine the short- and long-term relationship between the Islamic financial sector (Islamic debt and Islamic equity market), and sustainable economic growth of the two economies with the largest Muslim populations. Quarterly data were collected from 2010 to 2019 for Indonesia and Pakistan. The study used autoregressive distributive lag (ARDL) and the error correction method (ECM). The results revealed that in the long run, the Islamic banking sector imparts a significant and positive effect on achieving sustainable economic growth in both countries. However, in the short run, the Islamic stock market was found to have a positive relationship with Pakistan, while the Islamic banking sector had a positive and significant relationship with economic growth in Indonesia.

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“…This circumstance is partly confirmed by Grasso & Pattarin (2019) indicating that the rating of mini‐bonds issuers did not help investors reduce information asymmetries. Ongena et al (2019) studied the effects of mini‐bond issuances on issuers' financing conditions. They demonstrate that this diversification of funding sources reduces lending rates, thus improving firms' bargaining power with banks.…”

Section: Relevant Literature and Research Hypothesesmentioning

confidence: 99%

How can SMEs signal their quality and growth orientation to the market? An analysis of the cost of Italian corporate mini‐bonds

Boccaletti

Rossi

Rossolini

2022

Financ Manag Account

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We examine how small and medium-sized enterprises (SMEs) may signal their quality and growth orientation to the market and the effect on the cost of bond funding, which is often high for unlisted firms and SMEs mainly because of their information opacity and higher riskiness. The paper contributes to the growing European debate on market innovations aimed at facilitating funding for smaller and nonlisted firms, breaking from the prior main focus on the cost for large and listed companies of accessing liquid bond markets.We analyze 220 mini-bonds listed in Italy between 2013 and 2017 to examine determinants of yield spreads. Our explanatory variables are size, age, and tangible assets-all indicators of the firm's information opacity-together with the issuer's growth opportunities, rating availability, and the presence of a guarantee. The findings suggest that tangible assets can ease the asymmetric information and associated monitoring costs for investors, thus reducing the bond yield spread. More significantly, the yield spread depends on the type of investment project financed: risky growth projects are associated with a higher cost of funding

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Bank Credit and Market-based Finance for Corporations: The Effects of Minibond Issuances

Abstract: This paper should not be reported as representing the views of the European Central Bank (ECB). The views expressed are those of the authors and do not necessarily reflect those of the ECB.

Cited by 7 publications

References 58 publications

The Rise of Bond Financing in Europe

The Rise of Bond Financing in Europe

Achieving Sustainable Economic Growth: Analysis of Islamic Debt and the Islamic Equity Market

How can SMEs signal their quality and growth orientation to the market? An analysis of the cost of Italian corporate mini‐bonds

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