28.1.2014
at 10:30
Denis Davydov (PhD student in University of Vaasa, Dept of Accounting and Finance): Debt structure and corporate performance in Emerging Markets
Abstract
This paper examines the effects of public and bank debt financing on firm performance in
emerging markets. Using data on 700 publicly traded firms from the BRIC countries, it is
documented that bank debt may have a positive effect on firm profitability. While overall
market reaction on bank debt financing is negative, it is found that fully bank-financed
firms lose less of their market value. Main findings remain unchanged after addressing
potential endogeneity issues by introducing a novel instrumental variable. Overall, the
results suggest that higher levels of bank financing may have positive effects on firm
profitability and market valuation.
JEL classification: G15; G30; G32
Keywords: debt financing, bank debt, firm performance, emerging markets
BOFIT seminars
The seminars are open to all economists interested in the subject areas covered.
You need to pre-register for the seminar with
Ms Liisa Mannila (firstname.lastname@bof.fi, phone +358 10 831 2268).
Seminar will be held at Rauhankatu 19, 3rd floor seminar room (arrive at the Bank's Rauhankatu 19 entrance, from where you will be escorted to the BOFIT seminar room).
The seminars are open to all economists interested in the subject areas covered.
You need to pre-register for the seminar with
Ms Liisa Mannila (firstname.lastname@bof.fi, phone +358 10 831 2268).
Seminar will be held at Rauhankatu 19, 3rd floor seminar room (arrive at the Bank's Rauhankatu 19 entrance, from where you will be escorted to the BOFIT seminar room).