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

31 Pages Posted: 9 Aug 2017

See all articles by Svetlana Vtyurina

Svetlana Vtyurina

International Monetary Fund (IMF)

Adrian Robles

International Monetary Fund (IMF)

Bennett Sutton

International Monetary Fund (IMF)

Date Written: July 2017

Abstract

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.

Keywords: Latin America, capital structure, firm-level, LA-6, corporate bond markets, Institutions and the Macroeconomy, General

JEL Classification: E02, F30, G10, F3

Suggested Citation

Vtyurina, Svetlana and Robles, Adrian and Sutton, Bennett, A License to Issue (Anywhere): Patterns and Drivers of Corporate Bonds in Latin America (July 2017). IMF Working Paper No. 17/157, Available at SSRN: https://ssrn.com/abstract=3014087

Svetlana Vtyurina (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Adrian Robles

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Bennett Sutton

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
14
Abstract Views
246
PlumX Metrics