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Missing Investors in the Italian Corporate Bond Market

Author

Listed:
  • Matteo Accornero

    (Bank of Italy)

  • Paolo Finaldi Russo

    (Bank of Italy)

  • Giovanni Guazzarotti

    (Bank of Italy)

  • Valentina Nigro

    (Bank of Italy)

Abstract

We study the allocation of Italian corporate bonds among investors using a unique dataset that matches, for each security, information on the holding sectors with those of the bond and the issuer. Our main findings are the following: i) large companies issue bonds mainly on international markets, whereas smaller firms mainly target domestic markets; ii) in Italy, differently than in economies with more developed bond markets, the role of domestic institutional investors is limited, especially for SMEs� securities, while domestic households hold larger shares of these issues; iii) Italian households hold bonds of financially sounder firms, whereas foreign investors concentrate their holdings in riskier ones; for the other Italian investors we do not find evidence of a significant risk taking attitude. Even if in recent years institutional investors have significantly increased their holdings of Italian SMEs bonds, our findings suggest that the development of this market is still hampered by the limited presence of intermediaries specialized in the subscription of financial instruments issued by smaller, unlisted and riskier firms.

Suggested Citation

  • Matteo Accornero & Paolo Finaldi Russo & Giovanni Guazzarotti & Valentina Nigro, 2018. "Missing Investors in the Italian Corporate Bond Market," Questioni di Economia e Finanza (Occasional Papers) 450, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_450_18
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    References listed on IDEAS

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    3. Matteo Accornero & Paolo Finaldi Russo & Giovanni Guazzarotti & Valentina Nigro, 2015. "First-time corporate bond issuers in Italy," Questioni di Economia e Finanza (Occasional Papers) 269, Bank of Italy, Economic Research and International Relations Area.
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    Cited by:

    1. Fattouh, Bassam & Pisicoli, Beniamino & Scaramozzino, Pasquale, 2024. "Debt and financial fragility: Italian non-financial companies after the pandemic," Economic Modelling, Elsevier, vol. 131(C).
    2. Gabriele Beccari & Francesco Marchionne & Beniamino Pisicoli, 2022. "Alternative financing and investment in intangibles: evidence from Italian firms," Mo.Fi.R. Working Papers 174, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    3. Raffaele Gallo, 2020. "The impact of the IRB approach on the relationship between the cost of credit for public companies and financial market conditions," Temi di discussione (Economic working papers) 1290, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    corporate bond market; risk allocation; corporate bond holders;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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