A License to Issue (Anywhere) : Patterns and Drivers of Corporate Bonds in Latin America

Author/Editor:

Svetlana Vtyurina ; Adrian Robles ; Bennett W Sutton

Publication Date:

July 11, 2017

Electronic Access:

Free Full Text. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

This paper overviews patterns in bond issuance in local and external markets by firms in six large Latin American countries. Data suggest that despite rising issuance, local markets remain small and shallow in several countries. Nevertheless, since greater funding is available to many firms in both markets, we investigate the factors that may explain the firm’s choice on where to issue a bond. Using an unbalanced panel of firm and market-level indicators for years 1995-2015, we control for variables representing several theories of capital structure, and the results show that firm characteristics such as size and liquidity increase the likelihood of firms to issue externally. With respect to market characteristics, the market completeness hypothesis generates the most support, where market scale and depth are most important for the issuer’s choice of the market, suggesting that local markets will have to become deeper to draw more firms and investment.

Series:

Working Paper No. 17/157

Subject:

English

Publication Date:

July 11, 2017

ISBN/ISSN:

9781484305911/1018-5941

Stock No:

WPIEA2017157

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

30

Please address any questions about this title to publications@imf.org