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Mezzanine momentum: A cross-continental examination of corporate financing trends

Author

Listed:
  • Ghosh Prosenjeet

    (Department of Finance and Banking Faculty of Business Studies, Jashore University of Science and Technology, Jashore, Bangladesh)

  • Golder Uttam

    (Department of Finance and Banking Faculty of Business Studies, Jashore University of Science and Technology, Jashore, Bangladesh)

  • Shanur Rahman Md.

    (Department of Finance and Banking Faculty of Business Studies, Jashore University of Science and Technology, Jashore, Bangladesh)

  • Rumaly Nishat

    (Department of Finance and Banking Faculty of Business Studies, Jashore University of Science and Technology, Jashore, Bangladesh)

Abstract

Aim/purpose – Aside from conventional debt financing, mezzanine debt funding is an essential, nontraditional, and innovative instrument for financing a corporation. Nonetheless, the use and discussions on this particular type of financing are still limited. This study aims to investigate the nature and patterns of mezzanine debt financing and agreements at the global and regional levels, seeking to understand the trends and differences in its funding flows and deal movements across various continents so that businesses looking to grow abroad might use this analysis to identify places where mezza-nine finance is more accessible or advantageous. Moreover, investors can select the most appealing markets and conditions for mezzanine investments, thus improving their portfolios. Design/methodology/approach – Using seven global regions (e.g., Asia, Africa, Europe, Middle East, North America, Oceania, and rest of the world (RoW)) annual data from 2006 to 2023, this study employs descriptive analysis and applies the one-way between groups ANOVA. Findings – The findings show notable differences in the flows of mezzanine debt fundings and deals across different geographical locations globally. Besides, it also explores that mezzanine debt financing and agreements in North America and Europe make up most of the contributions, while other regions are still at the early stage of development. Research implications – Policymakers and governments in regions like Asia, Africa, the Middle East, Oceania, and the RoW should look into ways to increase the flow and growth of their agreements because the patterns and trends of funding and deals in those regions are considerably lower than North America and Europe. Originality/value/contribution – The literature on mezzanine debt mainly addresses its definition, features, facilities, disadvantages, and possible borrowers. This study investigates the recent pattern and trend of mezzanine debt funding and its deals globally based on different geographical locations.

Suggested Citation

  • Ghosh Prosenjeet & Golder Uttam & Shanur Rahman Md. & Rumaly Nishat, 2024. "Mezzanine momentum: A cross-continental examination of corporate financing trends," Journal of Economics and Management, Sciendo, vol. 46(1), pages 387-423.
    • Handle: RePEc:vrs:jecman:v:46:y:2024:i:1:p:387-423:n:1015
    DOI: 10.22367/jem.2024.46.15
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    References listed on IDEAS

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    1. Frank, Murray Z. & Goyal, Vidhan K., 2003. "Testing the pecking order theory of capital structure," Journal of Financial Economics, Elsevier, vol. 67(2), pages 217-248, February.
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    More about this item

    Keywords

    mezzanine; mezzanine financing; mezzanine debt; mezzanine deals;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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