Investor base and corporate borrowing: Evidence from international bonds

Massa, Massimo; Žaldokas, Alminas

doi:10.1016/j.jinteco.2013.11.002

Cited by 15 publications

(8 citation statements)

References 39 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Additionally, it cannot be attributed to larger investor networks (Massa and Zaldokas, 2014), as we show that the non-domestic bookrunner skewed syndicates is unrelated to the investors' demand for the bond. 3 Finally our results also hold when taking into account the bookrunner league table position.…”

Section: Introductionmentioning

confidence: 67%

“…Countries with higher credit ratings generally have larger corporate sectors and hence a broader mix of eligible corporate candidates for the bond market, including more cyclical and weaker rated firms. The threshold to access the corporate bond market could also be lower for companies from larger countries given they could be more familiar to a larger investor base (Kang and Stulz, 1997;Massa and Zaldokas, 2014).…”

Section: [Insert Table 3 About Here]mentioning

confidence: 99%

See 1 more Smart Citation

Bookrunner syndicate geography and the quality of service: The benefits of a local team

Krebbers

Marshall

McColgan

et al. 2021

Journal of International Money and Finance

View full text Add to dashboard Cite

Section: Introductionmentioning

confidence: 67%

Section: [Insert Table 3 About Here]mentioning

confidence: 99%

Bookrunner syndicate geography and the quality of service: The benefits of a local team

Krebbers

Marshall

McColgan

et al. 2021

Journal of International Money and Finance

View full text Add to dashboard Cite

“…The analysis of academic papers reveals the motivation of companies to issue international bonds as compared to domestic bonds, revolves around the cost incentives: Calomiris et al (2022), Massa & Žaldokas (2013), Black & Munro (2010), McBrady & Schill (2007), Baker et al (2003); risk management practices: Siegfried et al (2007), and specific characteristics of the issuance type. Additionally, Calomiris et al (2022) emphasized the desire to be present in an index, Black & Munro (2010) the demand to diversify the funding, both by employing multiple types of financial instruments and multiple markets, Siegfried et al (2007) the diversity of the investor base.…”

Section: Literature Reviewmentioning

confidence: 99%

Going Global or Staying Local: Determinants of Domestic and International Corporate Bond Issues in the Baltics

Tocelovska,

Vainovskis,

Lenerts

2023

EIS

View full text Add to dashboard Cite

In the period 2017-2022, there has been a notable growth in international bond placements by Baltic companies, which is distinct from corporate bond issuance in the European Economic Area. While the Baltic governments have demonstrated an increased focus on the corporate bond market development – the pan-Baltic Capital Markets Union launched in 2017 and covered bond law as adopted in Latvia in 2021, those activities are not directly linked to the ongoing shift to international corporate borrowing. In the academic literature, the determinants affecting corporate bond issuance are getting certain attention while studying separately the country-level determinants and the firm-level determinants, which are further split into domestic and international corporate bond issuance. For the Baltic countries, rare academic research has focused on the corporate bond market development of an individual Baltic country. This paper aims to discover the determinants for domestic and international corporate bond issuance of Baltic companies. While providing theoretical insight into corporate bond issuance rationale for both domestic and international placements, the paper focuses on factors that have contributed to firms choosing to issue bonds internationally. The methods applied in this study are scientific publication analysis, document analysis, expert survey, in-depth interviews, and statistical data analysis. For the statistical analysis, macroeconomic data was acquired from Cbonds, The World Bank, and International Monetary Fund databases in combination with company-specific data gathered from Nasdaq CSD, Orbis, Lursoft, Storybook, and Rekvizitai. The authors have employed a panel regression model for domestic and international bond issuance, and probit regression for all issued bonds in the Baltics from 2003-2022 to estimate the probability of pursuing bond financing internationally. The findings of this paper indicate that in the Baltics the main firm-level determinants for domestic corporate bond issuance are the company’s financial performance, its geographic exposure, documentation and listing costs, and access to alternative funding sources; on the country-level, the determinants are the share of sovereign international bonds of GDP, corruption perception, and exports as a share of GDP. For issuing international corporate bonds, the main determinants on the firm-level are bond placement size, company size, equity ratio, a satisfactory credit rating, and appropriate yields in the context of higher competition for international investor attention; on the country-level, GDP per capita, country’s export share, interest rate spread, regulatory quality, and political stability play an important role.

show abstract

“…As a result, our sampling procedure and estimating methods were subject to a double-selection problem, which may yield biased estimations. Following existing studies (Massa and Žaldokas, 2014;Popov and Udell, 2012), we adopted a two-step procedure to deal with the double-selection issue. (For the sake of brevity, we provide information on our identification strategies in Appendix A.)…”

Section: Identification Strategiesmentioning

confidence: 99%

“… See Milgrom and Roberts (1986) andSen and Bhattacharya (2001). 4 For the role of green management in creating new demand or command a price premium for environmentally sensitive consumers, seeMcWilliams and Siegel (2001); for its role in enhancing customer satisfaction and loyalty, seeLuo and Bhattacharya (2009), and increase sales (Ailawadi et al, 2014).…”

mentioning

confidence: 99%

How Have Green Companies Fared in Transactions with Banks? A Stakeholder‐Management Perspective

Jin

Liu

et al. 2018

J Applied Corp Finance

View full text Add to dashboard Cite

In a recent study, the authors investigated whether and to what extent a company's environmental practices and record affect the terms of its bank loans. The study reports evidence of a clear association between environment‐friendly corporate practices and both lower borrowing costs and less use of restrictive financial covenants. And consistent with the above findings, the authors also report that companies with better environmental practices have more stable income streams, lower leverage ratios, and higher future valuations. The authors also find that relationship (as opposed to first‐time) lenders respond to improvements in companies' environmental records by offering more favorable borrowing terms over time.Moreover, the authors find that the association between more effective environmental management and lower loan costs is more pronounced for corporate borrowers that operate in industries facing greater industry competition and stricter environmental regulation. In addition, borrowers with better records for green management are less likely to violate covenants, default on loans, or file for bankruptcy—a conclusion that should shed light on the current green finance policy debate among central banks and regulators as to whether they should reduce capital requirements or offer other policy inducements for bank financing of green assets.

show abstract

Investor base and corporate borrowing: Evidence from international bonds

Cited by 15 publications

References 39 publications

Bookrunner syndicate geography and the quality of service: The benefits of a local team

Bookrunner syndicate geography and the quality of service: The benefits of a local team

Going Global or Staying Local: Determinants of Domestic and International Corporate Bond Issues in the Baltics

How Have Green Companies Fared in Transactions with Banks? A Stakeholder‐Management Perspective

Contact Info

Product

Resources

About