The Development of Bond Markets in Emerging Economies

Settlements, Bank for International

doi:10.2139/ssrn.1187575

Cited by 9 publications

(3 citation statements)

References 23 publications

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“…Various studies have been conducted in the last decade to study the determinants of conventional bond markets (Adelegan & Radzewicz-Bak, 2009;Ameer, 2007;BIS, 2002;Braun & Briones, 2006;Burger & Warnock, 2004;Fanta, 2017;Fink, Haiss, & Hristoforova, 2003;Godlewski, Turk-Ariss, & Weill, 2013;Herring & Chatusripitak, 2000;Hristoforova, 2003;Kapingura & Makhetha-Kosi, 2014;Mu, Phelps, & Stotsky, 2013;Rudra P. Pradhan, Arvin, Bennett, Nair, & Hall, 2016;Sharma, 2001;Thumrongvit, Kim, & Pyun, 2013). Some of the studies find that macroeconomic factors play a significant role in the development of bond markets (Bondt, 2005;Korajczyk & Levy, 2003;Park & Shenoy, 2002).…”

Section: Literature Reviewmentioning

confidence: 99%

What Determines Bond Market Development? New Theoretical Insights

Aman

Naim

Isa

2019

SJOM

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Purpose- To diversify financing portfolio and reduce the reliance on the banking system, developing economies have realized the importance of bond market development. Bond markets facilitate economies to be more resilient towards the events of financial crises. Therefore, the share of the bond market in the financial system of the Asian economies has remarkably increased in the last decade. However, the academic literature on the bond market is very limited as compared to bank and equity markets. This was mainly because of the unavailability of vast data due to the absence of secondary markets for bonds in most of the economies. To fill this gap, this conceptual study postulates the theoretical relationships of bond market with various macroeconomic and financial factors. The study also assumes some new dimensions for bond financing and opens discussion for scholarly literature and empirical justifications. Design/Methodology- Content analysis approach is used to review relevant literature for the possible associations of the bond market with macroeconomic and financial factors. Practical Implications- The theoretical relationships discussed in the paper need empirical testing in future research to conclude policy implications. If the relationship between foreign capital and bond securities is established with empirical justification, we draw the policy that concerned authorities need to create a suitable environment for the attraction of foreign capital to provide support to the development of domestic debt market.

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Section: Literature Reviewmentioning

confidence: 99%

What Determines Bond Market Development? New Theoretical Insights

Aman

Naim

Isa

2019

SJOM

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“…And banks serve as dealers and market makers. They may thus foster development of a liquid and well-functioning bond market (Harwood, 2000 andHawkins, 2002). As such, bank and bond finance could either be complements or substitutes.…”

Section: Independent Variablesmentioning

confidence: 99%

Bond Markets in Africa

Phelps²,

Stotsky³

2013

IMF Working Papers

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African bond markets have been steadily growing in recent years, but nonetheless remain undeveloped. African countries would benefit from greater access to financing and deeper financial markets. This paper compiles a unique set of data on corporate bond markets in Africa. It then applies an econometric model to analyze the key determinants of African government securities market and corporate bond market capitalization. Government securities market capitalization is directly related to better institutions and interest rate volatility, and inversely related to the fiscal balance, higher interest rate spreads, exchange rate volatility, and current and capital account openness. Corporate bond market capitalization is directly linked to economic size, the level of development of the economy and financial markets, better institutions, and interest rate volatility, and inversely related to higher interest rate spreads and current account openness. Policy implications follow. This Working Paper should not be reported as representing the views of the IMF.

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“…Therefore, it is timely and relevant to see the various factors that determine the development of the sukuk and bond markets. In this regard, various studies have been conducted in the last decade to study the determinants of conventional bond market (Adelegan & Radzewicz-Bak, 2009;Aman, Naim, & Isa, 2019;Ameer, 2007;BIS, 2002;Braun & Briones, 2006;Burger & Warnock, 2004;Fanta, 2017;Fink, Haiss, & Hristoforova, 2003;Godlewski, Turk-Ariss, & Weill, 2013;Gopinath, 2007;Herring & Chatusripitak, 2000;Hristoforova, 2003;Kapingura & Makhetha-Kosi, 2014;Matei, 2013;Mu, Phelps, & Stotsky, 2013;R.P. Pradhan et al, 2015;Rudra P. Pradhan, Arvin, Bennett, Nair, & Hall, 2016;Sharma, 2001;Thumrongvit, Kim, & Pyun, 2013).…”

Section: Introductionmentioning

confidence: 99%

What Determines Sukuk Market Development? New Theoretical Insights

2019

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In recent past, the Asian economies faced various financial crises, 1997 & 2008, because of underdeveloped or small capital markets. Most of the countries continued to heavily depend on the mere banking system for sovereign and corporate financing needs which made the region repeatedly vulnerable to the crises state. Therefore, the last decade has witnessed the remarkable growth in the alternative arrangement in the form sukuk and bond markets. The academic literature on the topic mainly focuses on bond market ignoring largely the determinants of sukuk market. Using content analysis approach, this conceptual study proposes the theoretical relationships of sukuk with some new possible determining factors along with some other factors which have not received enough attention in the literature. The study focuses on the dynamics of foreign capital inflows, macroeconomic and financial variables with respect to sukuk market development.

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The Development of Bond Markets in Emerging Economies

Cited by 9 publications

References 23 publications

What Determines Bond Market Development? New Theoretical Insights

What Determines Bond Market Development? New Theoretical Insights

Bond Markets in Africa

What Determines Sukuk Market Development? New Theoretical Insights

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