Corporate Borrowing in Emerging Markets: Fairly Long Term, But Only for a Few

4 Pages Posted: 19 Oct 2018 Last revised: 29 Mar 2019

See all articles by Juan Jose Cortina Lorente

Juan Jose Cortina Lorente

World Bank

Tatiana Didier Brandao

affiliation not provided to SSRN

Sergio L. Schmukler

World Bank - Development Research Group (DECRG)

Date Written: October 1, 2018

Abstract

It is generally believed that firms in emerging markets rely on shorter-term instruments than firms in advanced economies. In recent years, firms in emerging market economies have substantially increased the amount of debt raised in global bond and syndicated loan markets, triggering concerns about their exposure to rollover risks. However, new evidence examined in this policy brief shows that emerging market firms have been using these markets to borrow long term, possibly diminishing the risks associated with higher debt levels and foreign currency financing. Challenging the conventional wisdom, large firms from emerging markets have issued bonds and syndicated loans at maturities similar to those issued by firms from advanced economies. These findings have implications for understanding the sources of short-termism in emerging markets, the actual risks emerging economies face from rising levels of corporate borrowing, and the policy measures that may help firms that cannot borrow long term.

Keywords: Capital Markets and Capital Flows, Capital Flows, Economic Conditions and Volatility, Macroeconomic Management, International Trade and Trade Rules, Economic Growth

Suggested Citation

Cortina Lorente, Juan Jose and Didier Brandao, Tatiana and Schmukler, Sergio, Corporate Borrowing in Emerging Markets: Fairly Long Term, But Only for a Few (October 1, 2018). World Bank Research and Policy Briefs No. 130976. Available at SSRN: https://ssrn.com/abstract=3269614

Juan Jose Cortina Lorente (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Tatiana Didier Brandao

affiliation not provided to SSRN

No Address Available

Sergio Schmukler

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN MC 3-301
Washington, DC 20433
United States
202-458-4167 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://www.worldbank.org/en/about/people/s/sergio-schmukler

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