The Rise of Bond Financing in Europe

Investor-Driven Corporate Finance: Evidence from Insurance Markets

“…They point to bond investor demand as an important determinant of corporate finance and investment, driven by investors' price impact in an inelastic bond market. Therefore, my analysis sheds light on the potential implications of firms' increasing reliance on bond financing (Berg et al, 2021;Darmouni and Papoutsi, 2020), the capital market dominance of institutional investors, and the potential real effects of their investment preferences. 2 I construct a rich data set that merges microlevel data on U.S. insurers' bond investments and insurance business with granular information on U.S. nonfinancial firms.…”

Investor-Driven Corporate Finance: Evidence from Insurance Markets

“…They point to bond investor demand as an important determinant of corporate finance and investment, driven by investors' price impact in an inelastic bond market. Therefore, my analysis sheds light on the potential implications of firms' increasing reliance on bond financing (Berg et al, 2021;Darmouni and Papoutsi, 2020), the capital market dominance of institutional investors, and the potential real effects of their investment preferences. 2 I construct a rich data set that merges microlevel data on U.S. insurers' bond investments and insurance business with granular information on U.S. nonfinancial firms.…”