Working Paper: NBER ID: w17763
Authors: Juan Carlos Gozzi; Ross Levine; Maria Soledad Martinez Peria; Sergio L. Schmukler
Abstract: This paper provides the first comprehensive documentation of the main features of corporate bond issues in domestic and international markets and analyzes how firms use these markets after they internationalize. We find that debt issues in domestic and international bond markets have different characteristics, not explained by differences across firms or their country of origin. International issues tend to be larger, of shorter maturity, denominated in foreign currency, and include a higher fraction of fixed rate contracts. Moreover, a large proportion of firms remain active in domestic bond markets after accessing international markets, and many of these firms use both markets for different types of issues. This evidence suggests that domestic and international bond markets provide different financial services and are not substitutes, but rather complements.
Keywords: Corporate bonds; International finance; Debt markets
JEL Codes: F36; G12; G15; G32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Market type (D49) | Issue size (G24) |
| Market type (D49) | Maturity (D25) |
| Market type (D49) | Prevalence of foreign currency-denominated bonds (G15) |
| Market type (D49) | Fraction of fixed-rate contracts (G12) |