Corporate financing in fixed-income markets: the contribution of monetary policy to lowering the size barrier

Pana Alves, Sergio Mayordomo and Manuel Ruiz-García
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Pana Alves: Banco de España
Manuel Ruiz-García: Banco de España

No 2209, Occasional Papers from Banco de España

Abstract: Access to financing in fixed-income markets enables firms to diversify their sources of financing and reduces their vulnerability, particularly in periods when access to bank credit is restricted. This paper analyses the factors explaining firms’ recourse to capital market financing using the ERICA database, which contains detailed information on the balance sheets of the main non-financial groups listed in euro area countries. The results show that size is the most important determinant of recourse to this source of financing. According to the results of this paper, the introduction of the corporate sector purchase programme by the European Central Bank in 2016 appears to have contributed to improving capital market access for smaller listed firms. Nonetheless, size continues to be a key barrier to capital market access. Implementation of other more structural initiatives, such as the capital markets union, could help to further reduce these barriers to access to external financing.

Keywords: corporate financing; fixed-income securities; CSPP; small listed firms; bank financing (search for similar items in EconPapers)
JEL-codes: E51 E52 E58 G12 G15 G2 G23 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2022-05
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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https://www.bde.es/f/webbde/SES/Secciones/Publicac ... 22/Files/do2209e.pdf First version, May 2022 (application/pdf)
https://www.bde.es/f/webbde/SES/Secciones/Publicac ... s/22/Fich/do2209.pdf Spanish version (application/pdf)

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