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This paper documents to what extent firms from developing countries borrow short versus long term, using data on corporate bond and syndicated loan markets. Contrary to claims in the literature based on firm balance sheets, firms from developing countries borrow through bonds and syndicated loans at maturities similar to those obtained by developed country firms. The composition and use of financing matters. Firms from developing countries borrow shorter term in domestic bond markets, but the differences in international issuances (accounting for most of the proceeds) are significantly smaller. Developing country firms borrow longer term in syndicated loan markets, which they partially use for infrastructure projects. However, only large firms from developing countries (similar in size to those from developed ones) issue bonds and syndicated loans. The short-termism in developing countries is partly explained by a lower proportion of firms using these markets, with more firms relying on other shorter-term instruments.

Capital Raising --- Corporate Bonds --- Developing Countries --- Domestic Debt --- Firm Financing --- International Debt --- Issuance Maturity --- Long-Term Debt --- Markets --- Short-Term Debt --- Syndicated Loans

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This paper studies the extent to which firms in China and India use capital markets to obtain financing and grow. Using a unique data set on domestic and international capital raising activity and firm performance, it finds that the expansion of financial market activity since the 1990s has been more limited than what the aggregate figures suggest. Relatively few firms raise capital. Even fewer firms capture the bulk of the financing. Moreover, firms that issue equity or bonds are different and behave differently from other publicly listed firms. Among other things, they are typically larger and grow faster. The differences between users and non-users exist before the capital raising activity, are associated with the probability of raising capital, and become more accentuated afterward. The distribution of issuing firms shifts more over time than the distribution of those that do not issue, suggesting little convergence in firm size among listed firms.

Access to Finance --- Access to finance --- Banks & Banking Reform --- Bond markets --- Capital market development --- Capital raising --- Debt Markets --- Economic Theory & Research --- Finance and Financial Sector Development --- Firm dynamics --- Firm size distribution --- Macroeconomics and Economic Growth --- Microfinance --- Stock markets

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Over the past decades, many countries have implemented significant reforms to foster domestic capital market development. These reforms included stock market liberalization, privatization programs, and the establishment of regulatory and supervisory frameworks. Despite the intense reform efforts, the performance of capital markets in several countries has been disappointing. To study whether reforms have had the intended effects on capital markets, the authors analyze the impact of six capital market reforms on domestic stock market development and internationalization using event studies. They find that reforms tend to be followed by significant increases in domestic market capitalization, trading, and capital raising. Reforms are also followed by an increase in the share of activity in international equity markets, with potential negative spillover effects on domestic markets.

Bank Policy --- Capital Market Development --- Capital Market Reforms --- Capital Markets --- Capital Raising --- Debt Markets --- Domestic Capital --- Domestic Capital Market --- Domestic Market --- Domestic Markets --- Emerging Markets --- Equity --- Equity Markets --- Exchange --- Finance and Financial Sector Development --- Financial Markets --- Globalization --- Macroeconomics and Economic Growth --- Market Capitalization --- Markets and Market Access --- Private Sector Development --- Share --- Stock --- Stock Market --- Stock Market Development --- Trading

Choose an application

• Reference Manager
• EndNote
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Over the past decades, many countries have implemented significant reforms to foster domestic capital market development. These reforms included stock market liberalization, privatization programs, and the establishment of regulatory and supervisory frameworks. Despite the intense reform efforts, the performance of capital markets in several countries has been disappointing. To study whether reforms have had the intended effects on capital markets, the authors analyze the impact of six capital market reforms on domestic stock market development and internationalization using event studies. They find that reforms tend to be followed by significant increases in domestic market capitalization, trading, and capital raising. Reforms are also followed by an increase in the share of activity in international equity markets, with potential negative spillover effects on domestic markets.

Bank Policy --- Capital Market Development --- Capital Market Reforms --- Capital Markets --- Capital Raising --- Debt Markets --- Domestic Capital --- Domestic Capital Market --- Domestic Market --- Domestic Markets --- Emerging Markets --- Equity --- Equity Markets --- Exchange --- Finance and Financial Sector Development --- Financial Markets --- Globalization --- Macroeconomics and Economic Growth --- Market Capitalization --- Markets and Market Access --- Private Sector Development --- Share --- Stock --- Stock Market --- Stock Market Development --- Trading