Naslov
Prerequisites and Constraints of Corporate Bond Market Development - Cross-Country Analysis

Autori
Miloš (Sprčić), Danijela

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
Proceedings of the 2nd International Conference „An Enterprise Odyssey: Building Competitive Advantage / - Zagreb : Ekonomski fakultet Sveučilišta u Zagrebu, 2004

ISBN
953-6025-10-8

Skup
2nd International Conference „An Enterprise Odyssey: Building Competitive Advantage

Mjesto i datum
Zagreb, Hrvatska, 17.06.2004. - 19.06.2004

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
corporate bond market; factors of development; prerequisites and obstacles; positive effects on economy; bank-based and market-based system

Sažetak
Corporate bond market is an important component of a developed financial system, but its size and volume differ from one country to another. The research conducted in different countries has shown that the most important factors of corporate bond market’s development are the relationships between the banking and corporate sector, as well as the laws and rules that regulate financial markets and business operations. A deeper cross-country analysis shows that the problem is not that simple, especially in the emerging markets. It takes time to develop viable bond markets in developing countries for both supply and demand-side reasons, and for institutional reasons as well. This article presents results of the exploratory research that has three aims: (1) to analyse corporate bond markets in developed countries and in developing countries and to explore problems of corporate bond market’s development (2) to explore, present and analyse influential factors of a corporate bond market’s development (3) to define effects that developed corporate bond market has on the economy and financial system. Results came from comparative analysis of secondary data collected from accessible digital and traditional sources. The analysis was conducted on the judgement (purposive) sample of selected countries. Corporate bond markets of eight countries were analysed. Namely, Germany, Japan, Great Britain and the USA were representatives of developed countries, while Croatia, Czech Republic, Hungary and Poland were representatives of developing countries. Research results have shown that the development of a corporate bond market depends on the large number of factors. These can be classified into the three groups: factors inside the market, factors across other parts of the financial market, and factors around the market. Although the development of a corporate bond market is a demanding task, many countries put a lot of effort and strategically develop their local bond markets. Reasons for that are numerous advantages and positive effects, which the development of corporate bond market has on the economy and financial system. Some of those advantages are a new source of capital, lower cost of capital, better allocation of long-term funds, supply of new financial products and reduced sensitivity of the economy to potential crises in the banking sector. Corporate bond market is developed and active only in the USA. The main causes of other markets underdevelopment are as follows: restrictive regulatory policies, concentration of a market power in the banking industry, and weak legal protection of investors. To these factors should be added some others that are characteristic of countries in transition, such as the following: small number of big and profitable companies that issue bonds, small number of institutional investors, small number of investment banks and market makers, underdeveloped government bond market, and absence of a yield-curve. Because there are many missing factors, it will take time to develop corporate bond markets in transition countries. However, with further development of their economies it is expected that the financial system will evolve from a bank-based to a market-based system and that corporate bond market will play an important role in financing long-term investments.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA