What determines debt structure in emerging markets: Transaction costs or public monitoring?

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dc.contributor.authorGoodell, John W.
dc.contributor.authorGoyal, Abhinav
dc.date.accessioned2020-01-21T16:44:24Z
dc.date.available2020-01-21T16:44:24Z
dc.date.issued2017-07-08
dc.date.updated2020-01-21T16:38:55Z
dc.description.abstractWe examine the predilection for private bonds over bank financing (debt structure) for emerging markets within the frameworks of both transaction cost economics and a transparency explanation, emphasizing the distinction between public monitoring (bonds) and private monitoring (banks), as well as considering the influence of national culture on institutions. Employing several tests, including structural equation modeling, we find, among many results that in emerging markets bonds are preferred over bank loans when there is less corporate opacity and fewer foreign access restrictions, as well as in environment of greater political instability, transaction cost, and limits to legal protection. Bonds are also favored over banks in cultural environments of greater uncertainty avoidance, masculinity, long-term orientation, and indulgence and less individualism. Overall, we attribute our results to culture and institutional quality together influencing debt structure, particularly by impacting attitudes toward public monitoring. Our results will be of great interest to researchers interested in the legal, social, and cultural environments of emerging markets.en
dc.description.statusPeer revieweden
dc.description.versionAccepted Versionen
dc.format.mimetypeapplication/pdfen
dc.identifier.citationGoodell, J. W. and Goyal, A. (2018) 'What determines debt structure in emerging markets: Transaction costs or public monitoring?', International Review of Financial Analysis, 55, pp. 184-195. doi 10.1016/j.irfa.2017.07.004en
dc.identifier.doi10.1016/j.irfa.2017.07.004en
dc.identifier.endpage195en
dc.identifier.issn1057-5219
dc.identifier.journaltitleInternational Review of Financial Analysisen
dc.identifier.startpage184en
dc.identifier.urihttps://hdl.handle.net/10468/9551
dc.identifier.volume55en
dc.language.isoenen
dc.publisherElsevieren
dc.relation.urihttps://www.sciencedirect.com/science/article/pii/S1057521917300777
dc.rights© 2019 Elsevier Inc. All rights reserved. This manuscript version is made available under the CC BY-NC-ND 4.0 licence.en
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/4.0/en
dc.subjectCorporate bondsen
dc.subjectDebt structureen
dc.subjectEmerging marketsen
dc.subjectNational cultureen
dc.subjectPublic monitoringen
dc.subjectRelationship financingen
dc.subjectTransaction costsen
dc.titleWhat determines debt structure in emerging markets: Transaction costs or public monitoring?en
dc.typeArticle (peer-reviewed)en
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