What Slice of the Pie? The Corporate Bond Market Boom in Emerging Economies

Diana Ayala, Milan Nedeljkovic and Christian Saborowski

No 6376, CESifo Working Paper Series from CESifo

Abstract: This paper studies the determinants of shifts in debt composition among emerging market non-financial corporates. We show that the determinants of bond market access in EMs vary with global cyclical conditions and across local and foreign currency markets. We find that the role for institutions and macro fundamentals in creating an enabling environment for markets increased during the post-crisis period for local currency markets. Foreign bank linkages additionally explain why local currency bond markets increasingly substituted for banks in channeling liquidity to EMs. In the case of foreign currency markets, in turn, global cyclical factors accounted for most of the variation. Furthermore, a country’s relative sensitivity to global factors appears to vary with the size of its foreign currency bond market rather than local fundamentals. Our results highlight the risk of capital flow reversal in those EMs that benefited from the upturn in the global financial cycle mostly due to the relative size of their bond markets rather than strong fundamentals.

Keywords: bond markets; capital flows; emerging markets (search for similar items in EconPapers)
JEL-codes: F30 G15 G20 G30 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-cfn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp6376.pdf (application/pdf)

Related works:
Journal Article: What slice of the pie? The corporate bond market boom in emerging economies (2017)
Working Paper: What Slice of the Pie? The Corporate Bond Market Boom in Emerging Economies (2015)
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:ces:ceswps:_6376

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().