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Creditor rights and the corporate bond market

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  • Gu, Xian
  • Kowalewski, Oskar

Abstract

This study examines whether investor protection affects capital markets, specifically the development of corporate bond markets versus equity markets. Using a dataset of 42 countries, we show that countries with strong creditor rights have more developed corporate bond markets than equity markets. However, we find only weak evidence that countries with stronger shareholder protection have more developed equity markets than corporate bond markets. Additionally, we find that the effect of financial reforms on capital markets is strongly dependent on the strength of investor protection and on the associated information disclosure in a given country.

Suggested Citation

  • Gu, Xian & Kowalewski, Oskar, 2016. "Creditor rights and the corporate bond market," Journal of International Money and Finance, Elsevier, vol. 67(C), pages 215-238.
    • Handle: RePEc:eee:jimfin:v:67:y:2016:i:c:p:215-238
    DOI: 10.1016/j.jimonfin.2016.05.002
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    Cited by:

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    2. Schweizer, Denis & Walker, Thomas & Zhang, Aoran, 2023. "False hopes and blind beliefs: How political connections affect China's corporate bond market," Journal of Banking & Finance, Elsevier, vol. 151(C).
    3. Franklin Allen & Xian Gu & Oskar Kowalewski, 2017. "Financial structure, economic growth and development," Post-Print hal-01917114, HAL.
    4. Anyangah, Joshua O., 2017. "Creditor rights protection, tort claims and credit," International Review of Law and Economics, Elsevier, vol. 52(C), pages 29-43.
    5. González, Francisco, 2023. "Creditor rights, bank competition, and stability: International evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 82(C).
    6. Byrka-Kita Katarzyna & Czerwiński Mateusz & Bajerska Aurelia, 2023. "Does deterioration in rule of law per se create or destroy value?," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 59(4), pages 277-296, December.

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    More about this item

    Keywords

    Corporate bond market; Equity market; Investor protection; Financial reform; Information disclosure; Crisis;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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