Why do firms issue abroad? Lessons from onshore and offshore corporate bond finance in Asian emerging markets

Paul Mizen, Frank Packer (), Eli Remolona and Serafeim Tsoukas

No 401, BIS Working Papers from Bank for International Settlements

Abstract: Corporate bond issuers in emerging economies in Asia have often had a choice between an onshore market and an offshore one. Since 1998, however, many of these issuers have increasingly turned to the onshore market. This paper investigates systematically what factors have influenced this choice between markets for issuers in eight emerging economies - China, Hong Kong SAR, Indonesia, Korea, Malaysia, the Philippines, Singapore and Thailand. For variables measuring market depth and liquidity, the availability of hedging instruments, and the size of the investor base, we rely on BIS statistics that have not been used in this literature before. We combine these market-level data with firm-level data in an unbalanced panel for the eight countries covering the period 1995 to 2007. We control for variables representing agency, static trade-off and risk management theories of the capital structure. Our results show that the choice between domestic and foreign markets has changed over time in large part because of the increased depth of the onshore market. The firms that benefit from such market development tend to be the unseasoned issuers rather than the seasoned ones.

Keywords: bond financing; offshore markets; derivatives; capital structure; emerging markets; market depth; Asian bond markets (search for similar items in EconPapers)
Pages: 51 pages
Date: 2012-12
New Economics Papers: this item is included in nep-ifn and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38)

Downloads: (external link)
http://www.bis.org/publ/work401.pdf Full PDF document (application/pdf)
http://www.bis.org/publ/work401.htm (text/html)

Related works:
Working Paper: Why do firms issue abroad? Lessons from onshore and offshore corporate bond finance in Asian emerging markets (2012)
Working Paper: Why do firms issue abroad? Lessons from onshore and offshore corporate bond finance in Asian emerging markets (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:401

Access Statistics for this paper

More papers in BIS Working Papers from Bank for International Settlements Contact information at EDIRC.
Bibliographic data for series maintained by Martin Fessler ().