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Firm financing and growth in the Arab region

Juan J. Cortina, Soha Ismail and Sergio Schmukler ()

Economic Systems, 2018, vol. 42, issue 2, 361-383

Abstract: This paper documents how firms in Arab countries use equity, corporate bond and syndicated loan markets to obtain financing and grow. Working with a new dataset on issuance activity in domestic and international markets and firm performance, the paper finds that capital raising through these markets has grown rapidly since the early 1990s and involved an increasing number of firms. Whereas the amounts raised in equity and loan markets (relative to gross domestic product) stand well relative to international standards, bond issuance activity lags behind. However, bond financing has gained importance over time. Equity issuances take place primarily in domestic markets, whereas bonds and loans are mostly issued internationally, display long maturities and entail low levels of credit risk. Issuing firms from the Arab region are very large compared to international standards. They also tend to be larger, faster growing and more leveraged than non-issuing firms in Arab countries.

Keywords: Arab countries; Capital raising; Corporate bonds; Domestic and international debt markets; Equity; Firm financing; Global financial crisis; Issuance activity; Middle East and North Africa region; Syndicated loans (search for similar items in EconPapers)
JEL-codes: F21 F65 G00 G10 G15 G23 G31 L25 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Firm Financing and Growth in the Arab Region (2017) Downloads
Working Paper: Firm financing and growth in the Arab region (2016) Downloads
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Handle: RePEc:eee:ecosys:v:42:y:2018:i:2:p:361-383