Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212851 
Year of Publication: 
2016
Series/Report no.: 
BOFIT Discussion Papers No. 8/2016
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
​This paper studies the determinants of shifts in debt composition among emerging market non-financial corporates. We show that institutions and macro fundamentals create an enabling environment for bond market development. During the recent boom episode, however, global cyclical factors accounted for most of the variation of bond shares in total corporate debt. The sensitivity to global factors appears to vary with relative bond market size rather than local fundamentals. Foreign bank linkages help explain why bond markets increasingly substituted for banks in channeling liquidity to EMs. Our results highlight the risk of capital flow reversal in EMs that benefited from the upturn in the global financial cycle mostly due to their liquid markets rather than strong fundamentals.
JEL: 
F30
G15
G20
G30
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-116-0
Document Type: 
Working Paper

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