Corporate Finance Under Low Interest Rates: Evidence from Hong Kong

Paul Mizen and Cihan Yalcin

No 112005, Working Papers from Hong Kong Institute for Monetary Research

Abstract: This paper examines the impact of the dramatic reduction in interest rates by the Federal Reserve on Hong Kong. Using a panel of several hundred firms in Hong Kong we find that firms increase all types of debt, but shift from short-term to long-term debt as rates fall. This can be attributed in part to a supplyside effect as the benign monetary policy environment has improved creditworthiness. The most noticable result from our analysis is the high level of bank dependence among Hong Kong firms and the continued dependence on bank finance even when interest rates fall. Potentially this may reveal that Hong Kong lacks the benefits of a deep domestic bond market.

Pages: 32 pages
Date: 2005-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.hkimr.org/uploads/publication/227/ub_full_0_2_110_wp200511_text.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.hkimr.org/uploads/publication/227/ub_full_0_2_110_wp200511_text.pdf [301 Moved Permanently]--> http://www.aof.org.hk/research/HKIMR/uploads/publication/227/ub_full_0_2_110_wp200511_text.pdf [301 Moved Permanently]--> https://www.aof.org.hk/research/HKIMR/uploads/publication/227/ub_full_0_2_110_wp200511_text.pdf)

Related works:
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:hkm:wpaper:112005

Access Statistics for this paper

More papers in Working Papers from Hong Kong Institute for Monetary Research Contact information at EDIRC.
Bibliographic data for series maintained by HKIMR ().