Debt source choices and stock market performance of Russian firms during the financial crisis

Denis Davydov and Sami Vähämaa

Emerging Markets Review, 2013, vol. 15, issue C, 148-159

Abstract: This paper examines the relationship between stock returns and the sources of corporate debt during the financial crisis of 2008. In particular, using data on large-capitalization Russian firms, we investigate whether dependence on either bank debt or bonds affected stock returns during the credit crunch. Our results indicate that the firms which rely entirely on bank debt significantly outperformed the firms with public debt amidst the crisis. This finding suggests that bank debt may be particularly valuable in harsh times. However, we also document that the stock prices of the bank dependent firms recovered more slowly in the post-crisis period.

Keywords: Debt sources; Bank dependence; Financial crisis; Stock market performance; Emerging markets (search for similar items in EconPapers)
JEL-codes: G01 G21 G32 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:15:y:2013:i:c:p:148-159

DOI: 10.1016/j.ememar.2013.01.001

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