Stock market reaction to debt financing arrangements in Russia
Christophe Godlewski (),
Zuzana Fungáčová () and
Laurent Weill ()
No 16/2010, BOFIT Discussion Papers from Bank of Finland, Institute for Economies in Transition
This paper investigates stock market reaction to debt arrangements in Russia. The analysis of the valuation of debt arrangements by stock markets provides information about the use of debt by Russian companies. We apply the event study methodology to check whether debt announcements lead to abnormal returns using a sample of Russian listed companies that issued syndicated loans or bonds between June 2004 and December 2008. We find a negative reaction of stock markets to debt arrangements that can be explained by moral hazard behavior of shareholders at the expense of debtholders. Further, we observe no significant difference between announcements of syndicated loans and bonds. Thus, our findings support the view that Russian companies could have incentives to limit their reliance on external debt. Keywords: corporate bonds, event study, Russia, stock returns, syndicated loans. JEL Classification: G14, G20, P30.
JEL-codes: G14 G20 P30 (search for similar items in EconPapers)
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Published in Published in Comparative Economic Studies, 2011, 53, (679-693)
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Journal Article: Stock Market Reaction to Debt Financing Arrangements in Russia (2011)
Working Paper: Stock Market Reaction to Debt Financing Arrangements in Russia (2011)
Working Paper: Stock market reaction to debt financing arrangements in Russia (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:bof:bofitp:2010_016
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