Loan versus Bond Financing of Czech Companies and the influence of the Global Recession

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F46747885%3A24310%2F17%3A00004032" target="_blank" >RIV/46747885:24310/17:00004032 - isvavai.cz</a>

Výsledek na webu

<a href="http://www.cjournal.cz/files/242.pdf" target="_blank" >http://www.cjournal.cz/files/242.pdf</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.7441/joc.2017.01.05" target="_blank" >10.7441/joc.2017.01.05</a>

Jazyk výsledku

angličtina

Název v původním jazyce

Loan versus Bond Financing of Czech Companies and the influence of the Global Recession

Popis výsledku v původním jazyce

European economies are traditionally considered to be bank based regarding the debt financing. However, in times of crises in the bank sector, this feature may indicate a weakness of these economies when the credit squeeze phenomenon may occur and companies’ competitiveness might be negatively affected thanks to unstable financing possibilities. In such conditions, a shift from bank loans to bonds might be expected. This research was focused on the mutual development of corporate bond and business loan markets in the developing Czech economy in the years 2006–2014 with regard to the impacts of the global financial crisis of 2008/2009. The main goal of this article was to identify whether, thanks to the impacts of the global recession in 2009, there was a shift in Czech economy in business financing from the loans to bonds in a similar fashion as in the case of East Asian economies after their financial crisis in the nineties. The main findings of this study are that since the global financial crisis, bond financing of businesses has been growing faster than loan financing. Czech economy thus shifts and becomes more bond market-based. The development of bond financing is positively correlated with the GDP per capita. Time series of both loans and bonds develop along the same trend. However, residual components are correlated negatively, which confirms the standing of loans and bonds as substitutes. Two main practical implications may be derived from this study. First, a growing usage of bonds increases demands on the market regulator, especially in the field of monitoring. Second, the growing bond market leads to the increased effectiveness, which makes additional effective sources of finance available to businesses and makes Czech economy more competitive even in times of difficulties in the banking sector.

Název v anglickém jazyce

Loan versus Bond Financing of Czech Companies and the influence of the Global Recession

Popis výsledku anglicky

European economies are traditionally considered to be bank based regarding the debt financing. However, in times of crises in the bank sector, this feature may indicate a weakness of these economies when the credit squeeze phenomenon may occur and companies’ competitiveness might be negatively affected thanks to unstable financing possibilities. In such conditions, a shift from bank loans to bonds might be expected. This research was focused on the mutual development of corporate bond and business loan markets in the developing Czech economy in the years 2006–2014 with regard to the impacts of the global financial crisis of 2008/2009. The main goal of this article was to identify whether, thanks to the impacts of the global recession in 2009, there was a shift in Czech economy in business financing from the loans to bonds in a similar fashion as in the case of East Asian economies after their financial crisis in the nineties. The main findings of this study are that since the global financial crisis, bond financing of businesses has been growing faster than loan financing. Czech economy thus shifts and becomes more bond market-based. The development of bond financing is positively correlated with the GDP per capita. Time series of both loans and bonds develop along the same trend. However, residual components are correlated negatively, which confirms the standing of loans and bonds as substitutes. Two main practical implications may be derived from this study. First, a growing usage of bonds increases demands on the market regulator, especially in the field of monitoring. Second, the growing bond market leads to the increased effectiveness, which makes additional effective sources of finance available to businesses and makes Czech economy more competitive even in times of difficulties in the banking sector.

Druh

J_ost - Ostatní články v recenzovaných periodicích

CEP obor

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OECD FORD obor

50206 - Finance

Projekt

—

Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2017

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Journal of Competitiveness

ISSN

1804-171X

e-ISSN

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Svazek periodika

9

Číslo periodika v rámci svazku

1

Stát vydavatele periodika

CZ - Česká republika

Počet stran výsledku

17

Strana od-do

72-88

Kód UT WoS článku

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EID výsledku v databázi Scopus

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