What Effect Has Bond Market Development in Emerging Asia Had on the Issuance of Corporate Bonds?

Mizen, Paul; Tsoukas, Serafeim

doi:10.2139/ssrn.1632102

Cited by 9 publications

(4 citation statements)

References 29 publications

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“…However, some recent research suggests that firmspecific characteristics are more important for the issuance of public bonds by corporations, with the most important factor being whether the firms had previously issued such bonds. Mizen and Tsoukas (2010) find the effect of local market size and liquidity to be small, and determine that the coordinated policies to encourage bond market development by Asian governments have had little effect on the probability of issuance at the firm level.…”

Section: Figure 5 Selected Asian Bond Marketsmentioning

confidence: 88%

The Development of Local Debt Markets in Asia

Goswami

Sharma²

2011

IMF Working Papers

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The paper makes an assessment of the progress made in developing local debt markets in emerging Asia. Market development has been limited by hurdles confronting borrowers and lenders, current and potential liquidity providers, and insufficient support from government policies and regulations. Besides fostering a credit culture to deepen local debt markets, the issue of critical size can be addressed through an integrated regional market for local currency bonds that provides greater scale, efficiency, and access. With rapid economic growth in Asia, a key challenge is to generate financial assets that can provide the underlying collateral for expanding fixed-income markets, and hence domestic and regional investment opportunities.

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Section: Figure 5 Selected Asian Bond Marketsmentioning

confidence: 88%

The Development of Local Debt Markets in Asia

Goswami

Sharma²

2011

IMF Working Papers

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“…Following Mizen and Tsoukas (2010) and Bose, MacDonald and Tsoukas (2019) we include controls for rm size, investment scaled by total assets, leverage, protability, tangible assets (collateral). 13 We allow for a rm being a previous issuer of a domestic or foreign bond to separate those rms that are previous issuers from new entrants to the market.…”

Section: P R(bonmentioning

confidence: 99%

Original sin in corporate finance: New evidence from Asian bond issuers in onshore and offshore markets

Mizen

Packer²,

Remolona

et al. 2021

Journal of International Money and Finance

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In this paper, we focus on the surprising phenomenon in which rms face diculty issuing in domestic currency even in the home market, especially in emerging markets.Could this be due to original sin which has been familiar to sovereign bond issuance?In its new incarnation, original sin refers to the diculty rms in many emerging markets have in borrowing domestically long-term, even in the local currency. We infer the nature of original sin from 5,901 nancing decisions by rms in seven Asian emerging markets over a period of 20 years. Our sample period covers an episode when bond issuers had a choice between a less developed but growing onshore market, which varied across countries in the level of development, and a deep and liquid oshore market. We nd that even in countries with onshore markets, it is often easier for unseasoned rms to issue oshore (in foreign currency) than to issue onshore, but changes in market development reverses this eect. In addition, once such a rm becomes a seasoned issuer, it is absolved from domestic original sin and is then able to act opportunistically and go to the market favored by interest dierentials.

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“…Mizen and Tsoukas (2008) show that bond issuers are approximately 10-15% larger than nonissuers in Indonesia, South Korea, Malaysia, and Thailand, though their evidence associating issuance with profitability is mixed. Denis and Mihov (2003) demonstrate that borrowers in US public debt markets are larger, more profitable, and have higher credit ratings, while smaller firms use banks or privately placed debt.…”

Section: Introductionmentioning

confidence: 99%