The Rise of Domestic Capital Markets for Corporate Financing
During the past decades, firms from emerging economies have significantly increased the amount of financing obtained in capital markets. Whereas the literature argues that international markets have been an important contributor to this process, th...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/861771557243057811/The-Rise-of-Domestic-Capital-Markets-for-Corporate-Financing http://hdl.handle.net/10986/31669 |
| Summary: | During the past decades, firms from
emerging economies have significantly increased the amount
of financing obtained in capital markets. Whereas the
literature argues that international markets have been an
important contributor to this process, the role of domestic
markets is mostly unknown. By examining the case of East
Asia, this paper shows that domestic markets have been a key
driver of the observed trends in capital market financing
since the early 2000s. As domestic markets developed, more
and smaller firms gained access to equity and corporate bond
financing. Domestic markets also helped some corporations to
diversify funding sources and obtain domestic currency
financing. Policy reforms following the Asian Financial
Crisis accompanied the growth of domestic markets. Part of
the reforms were aimed at developing domestic capital
markets for small and medium-size enterprises. Although
these markets have developed significantly, they still serve
relatively few corporations, albeit from new sectors. |
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