The growth of the real estate corporate bond market in Vietnam: the role of investor sentiment

Nhung Thi Nguyen, An Tuan Nguyen and Dinh Trung Nguyen

Review of Behavioral Finance, 2024, vol. 16, issue 4, 712-732

Abstract: Purpose - This paper aims to examine the effects of investor sentiment on the development of the real estate corporate bond market in Vietnam. Design/methodology/approach - The research uses an autoregressive distributed lag (ARDL) model with quarterly data. Additionally, the study employs Google Trends search data (GVSI) related to topics such as “Real Estate” and “Corporate Bond” to construct a sentiment index. Findings - The empirical outcomes reveal that real estate market sentiment improves the growth of the real estate corporate bond market, while stock market sentiment reduces it. Also, there is evidence of a long-run negative effect of corporate bond market sentiment on the total value of real estate bond issuance. Further empirical research evidences the short-term effect of sentiment and economic factors on corporate bond development in the real estate industry. Research limitations/implications - Due to difficulties in collecting data, this paper has the limited sample of 54 valid quarterly observations. Moreover, the sentiment index based on Google search volume data only reflects the interest level of investors, not their attitudes. Practical implications - These results yield important implications for policymakers in respect of strengthening the corporate bond market platform and maintaining stability in macroeconomic and monetary policies in order to promote efficient and sustainable market development. Social implications - The study offers some suggestions for regulators and governments to improve the real estate corporate bond market. Originality/value - This is the first quantitative study to examine the effect of sentiment factors on real estate corporate bond development in Vietnam.

Keywords: Psychological factors; Real estate firms; Corporate bond markets (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rbfpps:rbf-10-2023-0280

DOI: 10.1108/RBF-10-2023-0280

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