Authors: Olfa Berrich; Halim Dabbou; Mohamed Imen Gallali
Addresses: Management de l'Innovation et Développement Durable (LAMIDED), Department of Finance, Higher Institute of Management, University of Sousse, Tunisia ' Laboratory Risk Management and Research in Accounting and Finance (LaRIM-RAF): LR21ES29, University of Manouba, Tunisia ' Laboratory Risk Management and Research in Accounting and Finance (LaRIM-RAF): LR21ES29, University of Manouba, Tunisia
Abstract: The objective of this paper was to empirically investigate the factors of corporate bond market development for a sample of emerging and developed countries over the period 2008-2017. Here, we used both fixed effect and Prais-Winsten methods to study the determinants of corporate bond market development. We document a negative and significant relationship between primary market issuance and the over-the-counter (OTC) secondary corporate bond market that can be explained by the inefficiency of the OTC corporate bond market and the lack of trade transparency for this trading venue. We suggest that these microstructure elements of the OTC secondary market harm the corporate bond market development and thus discourage corporate bonds issuance. Furthermore, we provide strong evidence of the relationship between economic growth, domestic credits, corruption and the issuance of the domestic corporate bond market.
Keywords: over-the-counter market; primary issuance; corporate bond market development; post-trade transparency; market liquidity.
International Journal of Entrepreneurship and Small Business, 2022 Vol.47 No.2/3, pp.284 - 304
Accepted: 22 Dec 2021
Published online: 03 Nov 2022 *