Creditor rights and the corporate bond market

Gu, Xian; Kowalewski, Oskar

doi:10.1016/j.jimonfin.2016.05.002

Cited by 11 publications

(4 citation statements)

References 33 publications

(28 reference statements)

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“…Future research could also investigate the change in the relationship between rule-of-law level and equity risk premium in emerging markets. Given the extensive literature on risk premia in equity markets, relatively little is known about expected returns and risk premia in the corporate bond market in relation to the rule of law [Gu and Kowalewski, 2016]. Further studies may investigate the relationship between institutional environment improvement and corporate bond returns.…”

Section: Discussionmentioning

confidence: 99%

Does deterioration in rule of law per se create or destroy value?

Byrka-Kita,

Czerwiński,

Bajerska

2023

International Journal of Management and Economics

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We investigate the link between the rule of law and equity returns in post-transitional economies over the period January 2010–December 2020 by using panel data regressions. By applying several rule-of-law proxies for national legal frameworks and justice system quality as proxies for the rule-of-law principle, the data sets from the capital markets of Poland, Latvia, Lithuania, and Estonia showed that country-level judicial system quality is an important driver of company market performance, and that post-transitional countries with lower rule-of-law measures exhibit higher returns on equity than those with better measures. Our results support the idea that since poor governance and country instability increase agency and transaction costs, in addition to decreasing growth prospects and profitable projects available to companies, the risk premium demanded by investors increases, leading to higher equity returns.

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Section: Discussionmentioning

confidence: 99%

Does deterioration in rule of law per se create or destroy value?

Byrka-Kita,

Czerwiński,

Bajerska

2023

International Journal of Management and Economics

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“…As a result, in a crisis or period of recession, the corporate bond market may serve as an additional source of debt financing, capable of boosting the economy (Park, 2017). Gu and Kowalewski (2016) detect that countries with robust creditor rights have more developed corporate bond markets than stock markets. Becker and Ivashina (2014) contend that there is a substitution between bank borrowing channels and corporate bond debt issuance.…”

Section: Literature Review and Developing Hypothesismentioning

confidence: 99%

“…The growth of the corporate bond market is affected by many factors, including macro factors (Bhattacharyay, 2013;Kowalewski and Pisany, 2019), factors related to the structure of the financial market (Smaoui et al, 2017;Kowalewski and Pisany, 2019) and factors of institutional quality and creditor rights (Gu and Kowalewski, 2016;Smaoui et al, 2017). Recently, there have been studies considering sentiment factors as an important determinant.…”

Section: Introductionmentioning

confidence: 99%

The growth of the real estate corporate bond market in Vietnam: the role of investor sentiment

Nguyen,

Tuan Nguyen,

Nguyen

2024

RBF

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PurposeThis paper aims to examine the effects of investor sentiment on the development of the real estate corporate bond market in Vietnam.Design/methodology/approachThe research uses an autoregressive distributed lag (ARDL) model with quarterly data. Additionally, the study employs Google Trends search data (GVSI) related to topics such as “Real Estate” and “Corporate Bond” to construct a sentiment index.FindingsThe empirical outcomes reveal that real estate market sentiment improves the growth of the real estate corporate bond market, while stock market sentiment reduces it. Also, there is evidence of a long-run negative effect of corporate bond market sentiment on the total value of real estate bond issuance. Further empirical research evidences the short-term effect of sentiment and economic factors on corporate bond development in the real estate industry.Research limitations/implicationsDue to difficulties in collecting data, this paper has the limited sample of 54 valid quarterly observations. Moreover, the sentiment index based on Google search volume data only reflects the interest level of investors, not their attitudes.Practical implicationsThese results yield important implications for policymakers in respect of strengthening the corporate bond market platform and maintaining stability in macroeconomic and monetary policies in order to promote efficient and sustainable market development.Social implicationsThe study offers some suggestions for regulators and governments to improve the real estate corporate bond market.Originality/valueThis is the first quantitative study to examine the effect of sentiment factors on real estate corporate bond development in Vietnam.

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“…Reliable information supply (alleviating information asymmetry) and investor protection (especially for retail investors) may affect the stability and the vitality of the securities market (Black, 2001;Frost et al, 2006;La Porta et al, 2006). The reform of the capital market depends extremely on the legal system of investor protection and the mandatory measures for information disclosure (Allen et al, 2012;Gu and Kowalewski, 2016). Therefore, investors' ex ante information acquisition and ex post interest protection in the IPO market are very important for the successful promotion of reform.…”

Section: Literature Reviewmentioning

confidence: 99%

IPO information acquisition and investor protection

Huang

Sun

Chen

et al. 2020

NBRI

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Purpose The purpose of this study is to examine investors’ intention and behavior concerning ex ante information acquirement and ex post claims from the micro-level perspective with the deepening of the initial public offering (IPO) reform of China. Design/methodology/approach The authors made surveys and collected 932 valid questionnaires from investors in China. The authors also conducted interviews with sophisticated investors, investment bankers and government regulators to obtain first-hand information. Based on the survey results, the authors make the empirical analysis. Findings Investors’ attention to the first-hand information of the IPO prospectuses is inadequate. Individuals rely more on second-hand information, while institutions conduct more surveys. The higher the institutional practitioners’ degree of education, the more surveys they make. Only 1/3 investors intend to seek judicial remedy when getting fraud information due to high litigation costs and proof collecting difficulties. The investors who read more about prospectuses in advance are more likely to seek judicial protection afterwards. Compared with investors who know less about government administrative protection measures, those who know more have a low probability to choose “not to seek judicial protection.” Originality/value The authors enrich the research studies of IPO information acquisition and investor protection by conducting surveys to get first-hand data. Previous literature mostly makes empirical tests by using proxy variables.

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Creditor rights and the corporate bond market

Cited by 11 publications

References 33 publications

Does deterioration in rule of law per se create or destroy value?

Does deterioration in rule of law per se create or destroy value?

The growth of the real estate corporate bond market in Vietnam: the role of investor sentiment

IPO information acquisition and investor protection

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