Naslov
How do Croatian Companies make Bank Loan vs Corporate Bond Decision? – Evidence from the Field

Autori
Miloš Sprčić, Danijela

Vrsta, podvrsta i kategorija rada
Poglavlja u knjigama, znanstveni

Knjiga
Accounting and Finance in Transition, Book Series, Volume 2

Urednik/ci
Šević, Željko

Izdavač
Greenwich University Press

Grad
London : Delhi

Godina
2005

Raspon stranica
207-224

ISBN
1-86166-220-3

Ključne riječi
bank loan, corporate bond issue, debt structure, influential company’s characteristics, Croatians companies

Sažetak
Croatian corporate bond market is in the early phase of its development, as can be seen from the small number of corporate bond issues since the financial market was established in 1991. Only twelve companies have issued bonds, among which even eight were privately placed. The small number of corporations that are willing to make use of corporate bond issues for financing reveals itself as the biggest constraint upon the development of a Croatian corporate bond market. When it comes to the debt structure decision, for many Croatian companies bank loan is a more convenient instrument of financing. Therefore, the subject of this research is to define parameters of “a bank loan vs corporate bond decision” in Croatian companies. Results of a literature survey were tested on the hundred biggest and the most successful Croatian companies that are listed on the Stock Exchange. Big public companies were selected in the sample due to the fact that those companies more often have a dilemma of using different financial methods. The aim of a field research was to explore perceptions of financial managers about financing their companies with a bank loan vs corporate bond issue. Data to meet this aim were obtained through a survey questionnaire sent to CFOs. Results of the field research are consistent with a comprehensive review of former studies regarding a “bank loan vs corporate bond” decision. Bivariate analysis has shown that companies, which consider a possibility of issuing corporate bonds on the Croatian financial market, are the biggest companies in the sample, have higher reputation, more creditors and are using financial leverage more intensively if compared to other companies in the sample. But, it must be emphasised that only 32, 6 percent of the examined financial managers consider corporate bonds as a method of company financing, while the other 67, 4 percent do not even consider this possibility. Even more discouraging information is that 88 percent of the questioned CFOs think that the probability of issuing bonds in the next three years is less than 25 percent. On the basis of research results it could be concluded that, for a while, banks will remain the most important financial institutions and a bank loan will remain the most important instrument of a corporate financing. Unfortunately, raising capital through securities’ issues is very rare among Croatian companies. A bank loan is still a more convenient way of financing that matches their needs in a more adequate way. However, it can be expected that, with the development and growth of the Croatian economy, the number of big and successful companies will grow. In this way, the importance of raising capital by issuing securities, namely corporate bonds will grow as well.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA