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Creditor rights and corporate bond market

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  • Gu, Xian
  • Kowalewski, Oskar

Abstract

We examine whether investor protection affects capital markets in terms of the development of corporate bond markets versus that of equity markets. Using a dataset of 42 countries, we show that in countries with stronger creditor rights, corporate bond markets are more developed than equity markets. In opposition, we find only weak evidence that in countries with stronger shareholder protection, equity markets are more developed than corporate bond markets. Additionally, we find that the effects of financial reforms on capital markets are strongly dependent on the strength of investor protections in a given country and information disclosure.

Suggested Citation

  • Gu, Xian & Kowalewski, Oskar, 2015. "Creditor rights and corporate bond market," MPRA Paper 67022, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:67022
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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

    bond market; equity market; law; financial reform; information disclosure; crisis;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G2 - Financial Economics - - Financial Institutions and Services
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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