Determinants of corporate debt securities in the Euro area

Author: Bondt, Gabe¹

Source: The European Journal of Finance, Volume 11, Number 6, Number 6/December 2005 , pp. 493-509(17)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

This study examines the macroeconomic determinants of corporate debt securities in the euro area. The financing costs, as approximated by the cost of debt securities vis-à-vis other sources of corporate finance, and financing needs, as captured by mergers and acquisitions and gross domestic product, are found to be significant determinants in the short and long run. The empirical results are also supportive of substitution between debt security and internal financing unrelated to cost of differentials in the short run and of differences in the determination of long- and short-term debt securities. These findings are robust across different samples and specifications.

Keywords: Corporate finance; debt securities; euro area

Document Type: Research article

DOI: 10.1080/1351847042000255661

Affiliations: 1: European Central Bank, Capital Markets and Financial Structure, Frankfurt am Main, Germany

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