Asia's Reliance on Bank Debt Leaves Firms Vulnerable to Credit Shocks
The article looks at how companies in the US and Asia decide to use corporate bonds for financing. Asian firms use fewer corporate bonds than US firms, mainly relying on bank loans instead. This difference is especially noticeable for small companies. Even among firms that do use corporate bonds, Asian companies have lower bond debt compared to US companies. This suggests that Asian firms are less likely to access corporate bond markets and rely more on bank loans for funding.