Determinants of the Development of Corporate Bond Markets in Argentina: Survey to Firms and Investors

Abstract

Conventional theory leads to expect bonds to be a financing vehicle for large firms because of economies of scale and contracting costs. In this paper we present the results for Argentina of a survey of firms and of investors on the use of corporate bonds. The result of these surveys supports the idea that for Argentine firms, bonds are a financing vehicle of choice only for firms above a certain (large) size. This is independent of the criteria used for firm size. This result is similar to results in other countries such as the United Sates.

Keywords: debt structure, leverage, short-term debt, corporate bonds, firm size, firm value

JEL Classification: G3, E6