Banks and Corporate Debt Market Development

Paul Dickie () and Emma Xiaoqin Fan ()
Additional contact information
Paul Dickie: Victoria University of Wellington
Emma Xiaoqin Fan: Asian Development Bank

No 67, ADB Economics Working Paper Series from Asian Development Bank

Abstract: This paper explores the factors associated with the development of corporate debt markets using panel data covering 30 countries from 1989 to 2002. The results support Rajan and Zingales's (2003) 'interest group' theory of financial development that banks appear to oppose corporate debt market development as a potential force for their own disintermediation. The more concentrated the banking sector, the smaller the corporate bond market relative to the size of the economy. There is also evidence that the opening up of cross-border merger and acquisition activities and the presence of global corporations seem to weaken the influence of domestic banks. While outward-looking economic policies can reduce the power of domestic banks, the major countervailing force appears to be that committed governments recognizing corporate debt markets can enhance the resilience of their domestic economies.

Keywords: bank concentration; corporate bond market; financial development; interest groups; resilience (search for similar items in EconPapers)
JEL-codes: G15 G20 G32 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2005-04-01
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.adb.org/publications/banks-and-corporate-debt-market-development Full text (text/html)

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:ris:adbewp:0067

Access Statistics for this paper

More papers in ADB Economics Working Paper Series from Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. Contact information at EDIRC.
Bibliographic data for series maintained by Orlee Velarde ().