Economics, Econometrics and Finance
5 years ago

Asia's Reliance on Bank Debt Leaves Firms Vulnerable to Credit Shocks

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BIS Papers chapters
Comments on "Corporate bond use in Asia and the United States"
Vidhan K. Goyal

Paper Summary

The article looks at how companies in the US and Asia decide to use corporate bonds for financing. Asian firms use fewer corporate bonds due to poor infrastructure, relying more on bank loans. US firms use both bank loans and corporate bonds. Small Asian firms especially use less corporate debt compared to small US firms. Overall, Asian firms have lower bond leverage than US firms.

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