Corporate Debt Maturity in Developing Countries: Sources of Long and Short‐Termism

29 Pages Posted: 18 Dec 2018

See all articles by Juan J. Cortina

Juan J. Cortina

World Bank

Tatiana Didier

World Bank

Sergio L. Schmukler

World Bank - Development Research Group (DECRG)

Date Written: December 2018

Abstract

This paper documents to what extent firms from developing countries borrow short versus long term, using data on corporate bond and syndicated loan markets. Contrary to claims in the literature based on firm balance sheets, firms from developing countries borrow through bonds and syndicated loans at maturities similar to those obtained by developed country firms. There are relevant differences across the debt markets composing this aggregate pattern. Firms from developing countries borrow shorter term in domestic bond markets. But the differences in international issuances (accounting for most of the proceeds) are significantly smaller. Moreover, developing country firms borrow longer term in syndicated loan markets. However, only large firms from developing countries (similar in size to those from developed ones) issue bonds and syndicated loans. The short‐termism in developing countries is partly explained by a lower proportion of firms using these markets, with more firms relying on other shorter‐term instruments.

Keywords: capital raising, corporate bonds, developing countries, domestic and international debt markets, firm financing, issuance maturity, long‐term debt, short‐term debt, syndicated loans

Suggested Citation

Cortina, Juan J. and Didier, Tatiana and Schmukler, Sergio, Corporate Debt Maturity in Developing Countries: Sources of Long and Short‐Termism (December 2018). The World Economy, Vol. 41, Issue 12, pp. 3288-3316, 2018. Available at SSRN: https://ssrn.com/abstract=3302797 or http://dx.doi.org/10.1111/twec.12632

Juan J. Cortina (Contact Author)

World Bank

1818 H Street, NW
Washington, DC 20433
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Tatiana Didier

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States
(202)458-1525 (Phone)

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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