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Corporate debt maturity in developing countries: Sources of long and short‐termism
Author(s) -
Cortina Juan J.,
Didier Tatiana,
Schmukler Sergio L.
Publication year - 2018
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12632
Subject(s) - syndicated loan , developing country , bond , maturity (psychological) , debt , loan , monetary economics , emerging markets , business , financial system , economics , finance , psychology , developmental psychology , economic growth
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. There are relevant differences across the debt markets composing this aggregate pattern. 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. Moreover, developing country firms borrow longer term in syndicated loan markets. 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.